Economic activity in the services sector grew in June after contracting for just one month. The Institute for Supply Management Services Index indicated expansion at 50.8%, above the 50% breakeven point for the 11th time in the last 12 months.
“Ten industries reported growth in June, down one from the 11 industries reported in May. The Services PMI has contracted in only four of the last 60 months dating back to June 2020. The June reading of 49.9% is 2.4 pp below the 12-month average reading of 52.3%,” said Steve Miller, chair of the Institute for Supply Management Services Business Survey Committee. In June, the Services PM registered 49.9%, 1.7 pp lower than the May figure of 51.6%.
“In June, the Services PMI registered 50.8%, 0.9 pp higher than the May figure of 49.9%. The Business Activity Index returned to expansion territory in June, registering 54.2%, 4.2 pp higher than the ‘unchanged’ reading of 50% recorded in May. This index has not been in contraction territory since May 2020. The New Orders Index returned to expansion territory in June, recording a reading of 51.3%, an increase of 4.9 pp from the May figure of 46.4%. The Employment Index returned to contraction territory for the third time in the last four months; the reading of 47.2% is 3.5 pp lower than the 50.7% recorded in May,” Miller said.
The Inventories Index landed in expansion territory in June for the fourth time in 2025, registering 52.7%, an increase of 3 pp from May’s figure of 49.7%. The Inventory Sentiment Index expanded for the 26th consecutive month, registering 57.1%, down 5.8 pp from May’s figure of 62.9%. The Backlog of Orders Index continued its decline, registering 42.4% in June, a 1 pp decrease from the May figure of 43.4%, contracting for the 10th time in the last 11 months and posting its lowest reading since August 2023 (41.8%).
Miller continues, “June’s PMI level is a welcome return to expansion, although slow growth and economic uncertainty were frequently referenced by respondents. This month’s reading is equal to the average reading of 50.8% over the prior three months, indicating both stability and slight expansion in that time period.”
Read the ISM release.
