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Services PMI® at 53.4%; January 2024 Services ISM® Report On Business®Business Activity Index at 55.8%; New Orders Index at 55%; Employment Index at 50.5%; Supplier Deliveries Index at 52.4% This report reflects the recently completed annual adjustments to the seasonal factors used to calculate the indexes. TEMPE, Ariz., Feb. 5, 2024 /PRNewswire/ -- Economic activity in the services sector expanded in January for the 13th consecutive month as the Services PMI® registered 53.4 percent, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®. The sector has grown in 43 of the last 44 months, with the lone contraction in December 2022. 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: "In January, the Services PMI® registered 53.4 percent, 2.9 percentage points higher than December's seasonally adjusted reading of 50.5 percent. The composite index indicated growth in January for the 13th consecutive month after a seasonally adjusted reading of 49 percent in December 2022, which was the first contraction since May 2020 (45.4 percent). The Business Activity Index registered 55.8 percent in January, matching the seasonally adjusted reading of 55.8 percent in December. The New Orders Index expanded in January for the 13th consecutive month after contracting in December 2022 for the first time since May 2020; the figure of 55 percent is 2.2 percentage points higher than the seasonally adjusted December reading of 52.8 percent. "The Supplier Deliveries Index registered 52.4 percent, 2.9 percentage points above the 49.5 percent recorded in December. The index returned to expansion — indicating that supplier delivery performance was slower — after three consecutive months in contraction (or 'faster') territory. In the last 12 months, the average reading of 48.6 percent (with a low of 45.8 in March) reflects the fastest supplier delivery performance since December 2022, when the index registered 48.5 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 registered 64 percent in January, a 7.3-percentage point increase from December's seasonally adjusted reading of 56.7 percent. The Inventories Index contracted in January, registering 49.1 percent, a decrease of 0.5 percentage point from December's figure of 49.6 percent. The Inventory Sentiment Index (59.3 percent, up 4 percentage points from December's reading of 55.3 percent) expanded for the ninth consecutive month. The Backlog of Orders Index returned to expansion in January after two consecutive months in contraction, registering 51.4 percent, a 2-percentage point increase compared to the December reading of 49.4 percent. "Ten industries reported growth in January. The Services PMI®, by being above 50 percent for the 13th consecutive month (after a single month of contraction in December 2022 and a prior 30-month period of expansion), continues to indicate sustained growth — and at a faster rate in January — for the sector." Nieves continues, "The overall growth rate increase in January is attributable to faster growth of the New Orders, Employment, and Supplier Deliveries indexes. The majority of respondents indicate that business is steady. They are optimistic about the economy due to the potential impact of interest rate cuts; however, they are cautious due to inflation, associated cost pressures and ongoing geopolitical conflicts." INDUSTRY PERFORMANCE The 10 services industries reporting growth in January — listed in order — are: Health Care & Social Assistance; Agriculture, Forestry, Fishing & Hunting; Professional, Scientific & Technical Services; Public Administration; Utilities; Accommodation & Food Services; Construction; Other Services; Educational Services; and Management of Companies & Support Services. The seven industries reporting a decrease in the month of January — listed in order — are: Information; Retail Trade; Real Estate, Rental & Leasing; Mining; Arts, Entertainment & Recreation; Wholesale Trade; and Finance & Insurance. WHAT RESPONDENTS ARE SAYING
Services ISM® Report On Business® data is seasonally adjusted for the Business Activity, New Orders, Employment and Prices indexes. Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Inventories indexes. COMMODITIES REPORTED UP/DOWN IN PRICE, AND IN SHORT SUPPLY Commodities Up in Price Commodities Down in Price Commodities in Short Supply Note: The number of consecutive months the commodity is listed is indicated after each item. JANUARY 2024 SERVICES INDEX SUMMARIES Services PMI® A Services PMI® above 49 percent, over time, generally indicates an expansion of the overall economy. Therefore, the January Services PMI® indicates the overall economy is growing for the 13th consecutive month after one month of contraction in December 2022. Nieves says, "The past relationship between the Services PMI® and the overall economy indicates that the Services PMI® for January (53.4 percent) corresponds to a 1.5-percent increase in real gross domestic product (GDP) on an annualized basis." SERVICES PMI® HISTORY
Business Activity The 10 industries reporting an increase in business activity for the month of January — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Health Care & Social Assistance; Utilities; Management of Companies & Support Services; Public Administration; Professional, Scientific & Technical Services; Wholesale Trade; Finance & Insurance; Educational Services; and Transportation & Warehousing. The five industries reporting a decrease in business activity for the month of January are: Retail Trade; Real Estate, Rental & Leasing; Information; Mining; and Arts, Entertainment & Recreation.
New Orders The eight industries reporting an increase in new orders for the month of January — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Professional, Scientific & Technical Services; Health Care & Social Assistance; Utilities; Educational Services; Public Administration; Wholesale Trade; and Finance & Insurance. The six industries reporting a decrease in new orders for the month of January — listed in order — are: Retail Trade; Mining; Information; Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; and Transportation & Warehousing.
Employment The three industries reporting an increase in employment in January are: Construction; Accommodation & Food Services; and Public Administration. The eight industries reporting a decrease in employment in January — listed in order — are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Finance & Insurance; Information; Educational Services; Wholesale Trade; Retail Trade; and Utilities. Seven industries reported no change in employment in January.
Supplier Deliveries The nine industries reporting slower deliveries in January — listed in order — are: Health Care & Social Assistance; Arts, Entertainment & Recreation; Other Services; Real Estate, Rental & Leasing; Retail Trade; Professional, Scientific & Technical Services; Transportation & Warehousing; Educational Services; and Utilities. The five industries reporting faster supplier deliveries for the month of January are: Wholesale Trade; Management of Companies & Support Services; Construction; Information; and Public Administration.
Inventories The eight industries reporting an increase in inventories in January — listed in order — are: Accommodation & Food Services; Educational Services; Other Services; Agriculture, Forestry, Fishing & Hunting; Real Estate, Rental & Leasing; Transportation & Warehousing; Utilities; and Professional, Scientific & Technical Services. The seven industries reporting a decrease in inventories in January, in order, are: Retail Trade; Arts, Entertainment & Recreation; Construction; Management of Companies & Support Services; Wholesale Trade; Public Administration; and Health Care & Social Assistance.
Prices Fifteen services industries reported an increase in prices paid during the month of January, in the following order: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Construction; Other Services; Educational Services; Health Care & Social Assistance; Wholesale Trade; Public Administration; Professional, Scientific & Technical Services; Retail Trade; Finance & Insurance; Management of Companies & Support Services; Utilities; Information; and Transportation & Warehousing. The only industry reporting a decrease in prices for January is Agriculture, Forestry, Fishing & Hunting.
NOTE: Commodities reported as up in price and down in price are listed in the commodities section of this report. Backlog of Orders The seven industries reporting an increase in order backlogs in January — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Retail Trade; Health Care & Social Assistance; Utilities; and Educational Services. The nine industries reporting a decrease in order backlogs in January — listed in order — are: Other Services; Accommodation & Food Services; Mining; Wholesale Trade; Information; Transportation & Warehousing; Finance & Insurance; Construction; and Public Administration.
New Export Orders The five industries reporting an increase in new export orders in January are: Real Estate, Rental & Leasing; Information; Retail Trade; Professional, Scientific & Technical Services; and Wholesale Trade. The two industries reporting a decrease in new export orders in January are: Arts, Entertainment & Recreation; and Transportation & Warehousing. Eleven industries reported no change in new export orders in January.
Imports The seven industries reporting an increase in imports for the month of January, in order, are: Real Estate, Rental & Leasing; Retail Trade; Construction; Utilities; Management of Companies & Support Services; Information; and Health Care & Social Assistance. The four industries reporting a decrease in imports in January are: Mining; Transportation & Warehousing; Wholesale Trade; and Professional, Scientific & Technical Services. Seven industries reported no change in imports in January.
Inventory Sentiment The 13 industries reporting sentiment that their inventories were too high in January — listed in order — are: Arts, Entertainment & Recreation; Mining; Other Services; Real Estate, Rental & Leasing; Wholesale Trade; Utilities; Agriculture, Forestry, Fishing & Hunting; Construction; Retail Trade; Health Care & Social Assistance; Transportation & Warehousing; Information; and Management of Companies & Support Services. The only industry reporting a feeling that their inventories were too low in January is Professional, Scientific & Technical Services.
About This Report The data presented herein is obtained from a survey of supply executives in the services sector based on information they have collected within their respective organizations. ISM® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making. Data and Method of Presentation Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (Business Activity, New Orders, Backlog of Orders, New Export Orders, Inventory Change, Inventory Sentiment, Imports, Prices, Employment and Supplier Deliveries), this report shows the percentage reporting each response and the diffusion index. Responses represent raw data and are never changed. Data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The remaining indexes have not indicated significant seasonality. The Services PMI® is a composite index based on the diffusion indexes for four of the indicators with equal weights: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted) and Supplier Deliveries. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. An index reading above 50 percent indicates that the services economy is generally expanding; below 50 percent indicates that it is generally declining. Supplier Deliveries is an exception. A Supplier Deliveries Index above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries. A Services PMI® above 49 percent, over time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 49 percent, it is generally declining. The distance from 50 percent or 49 percent is indicative of the strength of the expansion or decline. The Services ISM® Report On Business® survey is sent out to Services Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on U.S. operations for the current month. ISM® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM® then compiles the report for release on the third business day of the following month. The industries reporting growth, as indicated in the Services ISM® Report On Business® monthly report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease. ISM ROB Content Except as explicitly and expressly permitted by ISM, you are strictly prohibited from creating works or materials (including, but not limited to: tables, charts, data streams, time-series variables, fonts, icons, link buttons, wallpaper, desktop themes, online postcards, montages, mashups and similar videos, greeting cards, and unlicensed merchandise) that derive from or are based on the ISM ROB Content. This prohibition applies regardless of whether the derivative works or materials are sold, bartered, or given away. 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Elliot Road, Suite 113, Tempe, AZ 85284-1556, or by emailing [email protected]; subject: Content Request. ISM shall not have any liability, duty, or obligation for or relating to the ISM ROB Content or other information contained herein, any errors, inaccuracies, omissions or delays in providing any ISM ROB Content, or for any actions taken in reliance thereon. In no event shall ISM be liable for any special, incidental, or consequential damages, arising out of the use of the ISM ROB. Report On Business®, Manufacturing PMI®, Services PMI®, and Hospital PMI® are registered trademarks of Institute for Supply Management®. Institute for Supply Management® and ISM® are registered trademarks of Institute for Supply Management, Inc. About Institute for Supply Management® The full text version of the Services ISM® Report On Business® is posted on ISM®'s website at www.ismrob.org on the third business day* of every month after 10:00 a.m. ET. The one exception is in January, the report is released on the fourth business day of the month. The next Services ISM® Report On Business® featuring February 2024 data will be released at 10:00 a.m. ET on Tuesday, March 5, 2024. *Unless the New York Stock Exchange is closed.
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