Wednesday, May 05, 2021

ISM® Services Index decreased to 62.7% in April

by Calculated Risk on 5/05/2021 10:04:00 AM

(Posted with permission). The March ISM® Services index was at 62.7%, down from 63.7% last month. The employment index increased to 58.8%, from 57.7%. Note: Above 50 indicates expansion, below 50 contraction.

From the Institute for Supply Management: April 2021 Services ISM® Report On Business®

Economic activity in the services sector grew in April for the 11th month in a row, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business.

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “The Services PMI® registered 62.7 percent, which is 1 percentage point lower than last month’s all-time high of 63.7 percent. The April reading indicates the 11th straight month of growth for the services sector, which has expanded for all but two of the last 135 months.

“The Supplier Deliveries Index registered 66.1 percent, up 5.1 percentage points from March’s reading of 61 percent. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.) The Prices Index figure of 76.8 percent is 2.8 percentage points higher than the March reading of 74 percent, indicating that prices increased in April, and at a faster rate. This is the index’s highest reading since it reached 77.4 percent in July 2008.

“According to the Services PMI®, 17 services industries reported growth. The composite index indicated growth for the 11th consecutive month after a two-month contraction in April and May 2020. There was slowing growth in the services sector in April; however, the rate of expansion is still strong. Respondents’ comments indicate that pent-up demand is continuing. Production-capacity constraints, material shortages, weather and challenges in logistics and human resources continue to affect deliveries, which has resulted in a reduction of inventories,” says Nieves.
emphasis added
The employment index increased to 58.8% from 57.2% in March.