The ISM Services Index fell by 3.9 percentage points (points) to 52.1%.
“Fourteen industries reported growth in November, matching the previous month’s total. The Services PMI® has expanded in 21 of the last 23 months dating back to January 2023, and the November reading is 0.2-points below its average of 52.3% for 2024.” “The decrease in the Services PMI® in November was driven by decreases in each of the four directly impacting subindexes (Business Activity, New Orders, Employment and Supplier Deliveries). However, 14 industries reported business activity growth, and 13 indicated new orders expansion; both figures are improvements compared to October. This reinforces the view over the last several months that the services sector has returned to sustained growth. Generally, respondents’ comments were neutral to positive, and both positive and negative impacts were attributed to seasonality. Not surprisingly, election ramifications and tariffs were mentioned often, with cautionary outlooks related to the potential impact on respondents’ specific industries,” said Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee.
The Business Activity Index registered 53.7% in November, 3.5 points lower than the 57.2%recorded in October, indicating a fifth month of expansion after contracting in June for the first time since May 2020. The Supplier Deliveries Index registered 49.5%, 6.9 percentage points lower than the 56.4% recorded in October. The index was in contraction territory for the sixth time in 2024 — indicating faster supplier delivery performance — after two months in expansion or ‘slower’ territory. (A reading of below 50% indicates faster deliveries). The Prices Index registered 58.2% in November, a 0.1-point increase from October’s reading of 58.1%. Respondents commented: “The economy is still causing issues within our business and that of our suppliers.” (Retail Trade).
The Inventories Index returned to contraction territory for the first time in four months. The reading of 45.9% is an 11.3-point decrease compared to the 57.2% reported in October. The Employment Index landed in expansion territory for the fourth time in five months; the reading of 51.5% is a 1.5-point decrease compared to the 53% recorded in October. Respondents commented: “Election results and the potential tariff changes would impact inventory and lead to higher prices in the hospital supply chain. What we saw during COVID-19 with startup U.S. production is a warning sign again.” (Professional, Scientific & Technical Services).
The Inventory Sentiment Index expanded for the 19th consecutive month, registering a reading of 54.6%, up 1.6 points from October’s reading of 53%. This reading indicates that respondents feel their inventories are too high when correlated to industry levels.
Read the ISM release.
