Economic activity in the services sector grew in July for the second consecutive month. The ISM Services Index indicated expansion at 50.1%, above the 50% breakeven point for the 12th time in the last 13 months.
“In July, the Services PMI registered 50.1%, 0.7 percentage point (pp) lower than the June figure of 50.8% but in expansion territory for the second month in a row. The Business Activity Index remained in expansion in July, registering 52.6%, 1.6 pp lower than the reading of 54.2% recorded in June,” said Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management (ISM) Services Business Survey Committee.
“This index has not been in contraction territory since May 2020. The New Orders Index also remained in expansion territory in July, recording a reading of 50.3%, a drop of 1 pp from the June figure of 51.3%. The Employment Index was in contraction territory for the second month in a row and the fourth time in the last five months; the reading of 46.4% is 0.8 pp lower than the 47.2% recorded in June,” said Miller.
The Inventories Index was in expansion territory in July for its second month in a row, registering 51.8%, a decrease of 0.9 pp from June’s figure of 52.7%. The Inventory Sentiment Index expanded for the 27th consecutive month, registering 53.2%, down 3.9 pp from June’s figure of 57.1%. The Backlog of Orders Index was in contraction territory for the fifth month in a row, registering 44.3% in July, a 1.9-percentage point increase from the June figure of 42.4%.
Miller continues, “July’s PMI level continues to reflect slow growth, and survey respondents indicated that seasonal and weather factors had negative impacts on business. The Employment Index’s continued contraction and faster expansion of the Prices Index are worrisome developments.
Read the ISM release.
