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Services PMI® at 49.4%; April 2024 Services ISM® Report On Business®Business Activity Index at 50.9%; New Orders Index at 52.2%; Employment Index at 45.9%; Supplier Deliveries Index at 48.5% TEMPE, Ariz., May 3, 2024 /PRNewswire/ -- Economic activity in the services sector contracted in April for the first time since December 2022, ending a period of 15 consecutive months of growth, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®. The Services PMI® registered 49.4 percent; it indicated sector expansion in 45 of the previous 47 months. 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 April, the Services PMI® registered 49.4 percent, 2 percentage points lower than March's reading of 51.4 percent. The composite index indicated contraction in April after 15 consecutive months of growth since a reading of 49 percent in December 2022, the first contraction since May 2020 (45.4 percent). The Business Activity Index registered 50.9 percent in April, which is 6.5 percentage points lower than the 57.4 percent recorded in March. The New Orders Index expanded in April for the 16th consecutive month after contracting in December 2022 for the first time since May 2020; the figure of 52.2 percent is 2.2 percentage points lower than the March reading of 54.4 percent. The Employment Index contracted for the fourth time in five months with a reading of 45.9 percent, a 2.6-percentage point decrease compared to the 48.5 percent recorded in March. "The Supplier Deliveries Index registered 48.5 percent, 3.1 percentage points higher than the 45.4 percent recorded in March. The index contracted for the third straight month — indicating that supplier delivery performance was faster — after one month in expansion (or 'slower') territory in January. (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 59.2 percent in April, a 5.8-percentage point increase from March's reading of 53.4 percent. The Inventories Index grew in April after four previous months of contraction, registering 53.7 percent, an increase of 8.1 percentage points from March's figure of 45.6 percent. The Inventory Sentiment Index (62.9 percent, up 7.2 percentage points from March's reading of 55.7 percent) expanded for the 12th consecutive month. The Backlog of Orders Index grew in April after contracting in March, registering 51.1 percent, a 6.3-percentage point increase compared to the March reading of 44.8 percent. "Twelve industries reported growth in April. The Services PMI® — through 15 consecutive months of growth after a single month of contraction in December 2022 and a prior 30-month period of expansion — had been indicating sustained growth for the sector. But the reading of under 50 percent in April reflects month-over-month contraction." Nieves continues, "The decline in the composite index in April is a result of lower business activity, slower new orders growth, faster supplier deliveries and the continued contraction in employment. Survey respondents indicated that overall business is generally slowing, with rates varying by company and industry. Employment challenges continue to be primarily due to difficulties in backfilling positions and/or controlling labor expenses. The majority of respondents indicate that inflation and geopolitical issues remain concerns." INDUSTRY PERFORMANCE 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. APRIL 2024 SERVICES INDEX SUMMARIES Services PMI® A Services PMI® above 49 percent, over time, generally indicates an expansion of the overall economy. Therefore, the April Services PMI® indicates the overall economy is growing for the 16th consecutive month. Nieves says, "The past relationship between the Services PMI® and the overall economy indicates that the Services PMI® for April (49.4 percent) corresponds to a 0.2-percent increase in real gross domestic product (GDP) on an annualized basis." SERVICES PMI® HISTORY
Business Activity The 13 industries reporting an increase in business activity for the month of April — listed in order — are: Accommodation & Food Services; Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Mining; Wholesale Trade; Utilities; Educational Services; Public Administration; Retail Trade; Construction; Health Care & Social Assistance; Management of Companies & Support Services; and Transportation & Warehousing. The four industries reporting a decrease in business activity for the month of April are: Other Services; Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; and Information.
New Orders The 12 industries reporting an increase in new orders for the month of April — listed in order — are: Accommodation & Food Services; Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; Construction; Mining; Utilities; Real Estate, Rental & Leasing; Finance & Insurance; Retail Trade; Educational Services; Public Administration; and Health Care & Social Assistance. The three industries reporting a decrease in new orders for the month of April are: Other Services; Information; and Professional, Scientific & Technical Services.
Employment The five industries reporting an increase in employment in April are: Accommodation & Food Services; Management of Companies & Support Services; Construction; Mining; and Utilities. The 10 industries reporting a decrease in employment in April — listed in order — are: Other Services; Real Estate, Rental & Leasing; Information; Finance & Insurance; Wholesale Trade; Retail Trade; Public Administration; Transportation & Warehousing; Health Care & Social Assistance; and Professional, Scientific & Technical Services.
Supplier Deliveries The five industries reporting slower deliveries in April are: Retail Trade; Educational Services; Health Care & Social Assistance; Construction; and Utilities. The six industries reporting faster supplier deliveries for the month of April — listed in order — are: Wholesale Trade; Mining; Accommodation & Food Services; Information; Transportation & Warehousing; and Public Administration. Seven industries reported no change in April.
Inventories The six industries reporting an increase in inventories in April — in the following order — are: Retail Trade; Agriculture, Forestry, Fishing & Hunting; Transportation & Warehousing; Public Administration; Real Estate, Rental & Leasing; and Wholesale Trade. The seven industries reporting a decrease in inventories in April, in order, are: Mining; Construction; Management of Companies & Support Services; Professional, Scientific & Technical Services; Information; Health Care & Social Assistance; and Utilities.
Prices Fourteen services industries reported an increase in prices paid during the month of April, in the following order: Construction; Management of Companies & Support Services; Public Administration; Other Services; Retail Trade; Accommodation & Food Services; Educational Services; Finance & Insurance; Real Estate, Rental & Leasing; Wholesale Trade; Information; Utilities; Health Care & Social Assistance; and Professional, Scientific & Technical Services. No industry reported a decrease in prices for the month of April.
NOTE: Commodities reported as up in price and down in price are listed in the commodities section of this report. Backlog of Orders The nine industries reporting an increase in order backlogs in April, in order, are: Agriculture, Forestry, Fishing & Hunting; Real Estate, Rental & Leasing; Management of Companies & Support Services; Utilities; Educational Services; Finance & Insurance; Construction; Transportation & Warehousing; and Professional, Scientific & Technical Services. The six industries reporting a decrease in order backlogs in April — in the following order — are: Other Services; Information; Mining; Public Administration; Wholesale Trade; and Health Care & Social Assistance.
New Export Orders The three industries reporting an increase in new export orders in April are: Transportation & Warehousing; Utilities; and Professional, Scientific & Technical Services. The three industries reporting a decrease in new export orders in April are: Retail Trade; Information; and Wholesale Trade. Twelve industries reported no change in new export orders in April.
Imports The seven industries reporting an increase in imports for the month of April, in order, are: Accommodation & Food Services; Real Estate, Rental & Leasing; Transportation & Warehousing; Management of Companies & Support Services; Utilities; Wholesale Trade; and Professional, Scientific & Technical Services. The two industries reporting a decrease in imports in April are: Other Services; and Health Care & Social Assistance. Nine industries reported no change in imports in April.
Inventory Sentiment The 11 industries reporting sentiment that their inventories were too high in April — listed in order — are: Real Estate, Rental & Leasing; Agriculture, Forestry, Fishing & Hunting; Other Services; Wholesale Trade; Retail Trade; Mining; Utilities; Information; Health Care & Social Assistance; Management of Companies & Support Services; and Construction. The only industry reporting a feeling that their inventories were too low in April is Transportation & Warehousing. Six industries indicated no change in inventory sentiment in April.
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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