Economic activity in the services sector continued to expand in September, marking the ninth consecutive month of growth. According to the Services ISM Report On Business, the Services PMI registered 53.6%, indicating positive growth. While this reading was 0.9% age points lower than August's figure, it still signifies sustained expansion in the sector, which has grown in 39 of the last 40 months.
Several key indices contribute to the positive outlook, including the Business Activity Index at 58.8% and the Employment Index at 53.4%. However, the New Orders Index dipped to 51.8% in September, showing a slower rate of growth in new orders. The Supplier Deliveries Index reached 50.4%, indicating that supplier deliveries have improved. Additionally, the Prices Index held steady at 58.9%.
The report reflects overall optimism among industry professionals, with 13 services industries reporting growth in September, including Real Estate, Retail Trade, and Health Care & Social Assistance. However, a few industries, such as Agriculture, Forestry, Fishing & Hunting and Arts, Entertainment & Recreation, reported a decrease in activity.
“Projections seem to be that we’re going to have a strong 4th Quarter,” said Anthony Nieves, Chair of the Institute for Supply Management (ISM) Services Business Survey Committee. “Supply and deliveries are slowing. We’re seeing improved capacity but deliveries are beginning to slow. Inventories continue to be managed,” he said.
The Services PM continues to indicate sustained growth in the services sector, with a slight pullback in the rate of growth attributed to slower growth in new orders and employment. “Employment is a mixed bag,” said Nieves. “It varies by industry. Some (businesses) are just not back-filling. Industries driving employment right now are customer-facing jobs (retail trade, food services).”
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