Economic activity in the services sector continued to expand in December. The ISM Services Index indicated expansion at 54.4% for the tenth time in 2025. A value above 50 reflects expansion in the services sector while a value below 50 represents a contraction.
“In December, the Services PMI® registered a reading of 54.4%, 1.8 percentage points (pp) higher than the November figure of 52.6% and a third consecutive month of expansion. The Business Activity Index continued in expansion territory in December, registering 56%, 1.5 pp higher than the reading of 54.5% recorded in November,” said Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee. Respondents from Agriculture, Forestry, Fishing & Hunting said, “In general, business is flat. Value brands are still experiencing higher demand. But premium brands struggle to maintain market share.”
The New Orders Index registered 57.9% in December, 5 pp higher than the reading of 52.9% reported in November. The index has been in expansion territory in 34 of the last 36 months, and December’s reading is its highest since registering 59.1% in September 2024. Respondents from wholesale trade said, “Year-over-year growth has been coming down for the last three months. Most likely, the government shutdown was a contributor.”
The Inventories Index continued in expansion territory, registering 54.2%, a 0.8 pp increase compared to the 53.4% reported in November. The Inventory Sentiment Index was in expansion (or “too high”) territory for the 32nd consecutive month in December; the reading of 54.1% is a decrease of 0.7 pp from November’s figure of 54.8%. The Backlog of Orders Index was in contraction territory for the 10th consecutive month, and the reading of 42.6% was a 6.5 pp decrease compared to the 49.1% reported in November.
Read the ISM release.
