ISM Services: Slight Improvement In January

The Institute of Supply Management (ISM) has now released the January Services Purchasing Managers' Index (PMI). The headline Composite Index is at percent 58.7, up 1.0 from 57.7 last month. Today's number came in above the forecast of 56.8 percent.

Here is the report summary:

(Tempe, Arizona) — Economic activity in the services sector grew in January for the eighth 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 58.7 percent, 1 percentage point higher than the seasonally adjusted December reading of 57.7 percent. This reading is the highest since February 2019 (58.8 percent) and indicates the eighth straight month of growth for the services sector, which has expanded for all but two of the last 132 months.

“The Supplier Deliveries Index registered 57.8 percent, down 5 percentage points from December’s reading of 62.8 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 64.2 percent is 0.2 percentage point lower than the seasonally adjusted December reading of 64.4 percent, indicating that prices increased in January, and at a slower rate. According to the Services PMI®, 14 services industries reported growth. The composite index indicated growth for the eighth consecutive month after a two-month contraction in April and May. There was continued growth in the services sector for the month of January. Respondents’ comments are more optimistic about business conditions and the economy. Various local- and state-level COVID-19 restrictions continue to negatively impact companies and industries. Production capacity and logistics issues continue to cause supply chain challenges,” says Nieves. [Source]

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