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Services PMI® at 57.1%; April 2022 Services ISM® Report On Business®Business Activity Index at 59.1%; New Orders Index at 54.6%; Employment Index at 49.5%; Supplier Deliveries Index at 65.1% TEMPE, Ariz., May 4, 2022 /PRNewswire/ -- Economic activity in the services sector grew in April for the 23rd month in a row — with the Services PMI® registering 57.1 percent — 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: "In April, the Services PMI® registered 57.1 percent, 1.2 percentage points lower than March's reading of 58.3 percent. The Business Activity Index registered 59.1 percent, an increase of 3.6 percentage points compared to the reading of 55.5 percent in March, and the New Orders Index figure of 54.6 percent is 5.5 percentage points lower than the March reading of 60.1 percent. "The Supplier Deliveries Index registered 65.1 percent, 1.7 percentage points higher than the 63.4 percent reported in March. (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 reached an all-time high of 84.6 percent, up 0.8 percentage point from the March figure of 83.8 percent and surpassing the previous record of 83.9 percent in December 2021. Services businesses are continuing to replenish inventories, as the Inventories Index expanded for a third straight month; the reading of 52.3 percent is up 0.6 percentage point from March's figure of 51.7 percent. The Inventory Sentiment Index (46.7 percent, up 6.5 percentage points from March's reading of 40.2 percent) contracted in April for the second consecutive month, indicating that inventories are in 'too low' territory and insufficient for current business requirements." Nieves continues, "According to the Services PMI®, 17 industries reported growth. The composite index indicated growth for the 23rd consecutive month after a two-month contraction in April and May 2020. Growth continues for the services sector, which has expanded for all but two of the last 147 months. There was a pullback in the composite index, mostly due to the restricted labor pool (impacting the Employment Index) and the slowing of new orders growth. Business activity remains strong; however, high inflation, capacity constraints and logistical challenges are impediments, and the Russia-Ukraine war continues to affect material costs, most notably of fuel and chemicals." INDUSTRY PERFORMANCE The 17 services industries reporting growth in April — listed in order — are: Construction; Utilities; Management of Companies & Support Services; Real Estate, Rental & Leasing; Accommodation & Food Services; Public Administration; Professional, Scientific & Technical Services; Educational Services; Mining; Transportation & Warehousing; Wholesale Trade; Finance & Insurance; Other Services; Health Care & Social Assistance; Retail Trade; Arts, Entertainment & Recreation; and Agriculture, Forestry, Fishing & Hunting. The only industry reporting a decrease in April is Information. 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. *Number of months moving in current direction. 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. *Indicates both up and down in price. APRIL 2022 SERVICES INDEX SUMMARIES Services PMI® A Services PMI® above 50.1 percent, over time, generally indicates an expansion of the overall economy. Therefore, the April Services PMI® indicates the overall economy has followed the same path as the services sector: expansion for 23 straight months following two months of contraction and a preceding period of 122 months of growth. Nieves says, "The past relationship between the Services PMI® and the overall economy indicates that the Services PMI® for April (57.1 percent) corresponds to a 2.5-percent increase in real gross domestic product (GDP) on an annualized basis." SERVICES PMI® HISTORY
Business Activity ISM®'s Business Activity Index registered 59.1 percent in April, an increase of 3.6 percentage points from the reading of 55.1 percent in March, indicating growth for the 23rd consecutive month. Comments from respondents include: "Restaurant traffic remains strong since COVID-19 cases have declined and mask restrictions were lifted" and "Activity requests from customers continues to grow, while we have had reduced head count at the same time." The 14 industries reporting an increase in business activity for the month of April — listed in order — are: Real Estate, Rental & Leasing; Accommodation & Food Services; Educational Services; Mining; Public Administration; Utilities; Transportation & Warehousing; Professional, Scientific & Technical Services; Construction; Management of Companies & Support Services; Health Care & Social Assistance; Wholesale Trade; Other Services; and Finance & Insurance. No industry reported a decrease in business activity for the month of April.
New Orders ISM®'s New Orders Index registered 54.6 percent, down 5.5 percentage points from the March reading of 60.1 percent. New orders grew for the 23rd consecutive month after two months of contraction and a preceding period of 128 months of expansion. Comments from respondents include: "New customers added, which has led to greater sales orders and business activity" and "Market demand increasing." Thirteen industries reported growth of new orders in April, in the following order: Utilities; Management of Companies & Support Services; Real Estate, Rental & Leasing; Accommodation & Food Services; Educational Services; Transportation & Warehousing; Professional, Scientific & Technical Services; Public Administration; Construction; Wholesale Trade; Health Care & Social Assistance; Other Services; and Finance & Insurance. The one industry reporting a decrease in new orders in April is Information.
Employment Employment activity in the services sector contracted in April. ISM®'s Employment Index registered 49.5 percent, down 4.5 percentage points from the reading of 54 percent registered in March. Comments from respondents include: "Job openings exist, but finding talent to fill them remains a struggle across most industry sectors and job categories" and "Demand for employment remains hypercompetitive; there is just not enough qualified personnel available." The 10 industries reporting an increase in employment in April — listed in order — are: Construction; Mining; Management of Companies & Support Services; Arts, Entertainment & Recreation; Professional, Scientific & Technical Services; Transportation & Warehousing; Accommodation & Food Services; Wholesale Trade; Utilities; and Finance & Insurance. The five industries that reported a reduction in employment in April are: Real Estate, Rental & Leasing; Retail Trade; Information; Educational Services; and Health Care & Social Assistance.
Supplier Deliveries The Supplier Deliveries Index registered 65.1 percent, up 1.7 percentage points from the 63.4 percent registered in March. A reading above 50 percent indicates slower deliveries, while a reading below 50 percent indicates faster deliveries. Comments from respondents include: "The international chip shortage is affecting the deliveries of certain technology equipment." and "Capacity, shipping and raw material issues continue to plague manufacturers." Also: "Paper products are hard to find." The 16 industries reporting slower deliveries in April — listed in order — are: Retail Trade; Real Estate, Rental & Leasing; Utilities; Construction; Public Administration; Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Other Services; Arts, Entertainment & Recreation; Information; Educational Services; Management of Companies & Support Services; Wholesale Trade; Health Care & Social Assistance; Accommodation & Food Services; and Professional, Scientific & Technical Services. The only industry reporting faster supplier deliveries in April is Transportation & Warehousing.
Inventories The Inventories Index grew in April for the third consecutive month after eight preceding months of contraction. The reading of 52.3 percent was a 0.6-percentage point increase from the 51.7 percent reported in March. Of the total respondents in April, 39 percent indicated they do not have inventories or do not measure them. Comments from respondents include: "We built inventory levels this month due to supply chain uncertainty and anticipated higher business levels in May" and "Stocking up due to price increases, shortages, lead times and additional sales opportunities." The eight industries reporting an increase in inventories in April — listed in order — are: Finance & Insurance; Mining; Other Services; Construction; Utilities; Wholesale Trade; Accommodation & Food Services; and Public Administration. The three industries reporting a decrease in inventories in April are: Real Estate, Rental & Leasing; Management of Companies & Support Services; and Information. Seven industries indicated no change in inventories in April.
Prices Prices paid by services organizations for materials and services increased in April for the 59th consecutive month, with the index registering 84.6 percent, 0.8 percentage point higher than the March figure of 83.8 percent. This is highest reading ever, exceeding the seasonally adjusted figure of 83.9 percent registered in December 2021. All 18 services industries reported an increase in prices paid during the month of April, in the following order: Arts, Entertainment & Recreation; Mining; Real Estate, Rental & Leasing; Wholesale Trade; Construction; Accommodation & Food Services; Management of Companies & Support Services; Educational Services; Finance & Insurance; Public Administration; Utilities; Information; Transportation & Warehousing; Professional, Scientific & Technical Services; Health Care & Social Assistance; Retail Trade; Other Services; and 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 ISM® Services Backlog of Orders Index grew in April for the 16th consecutive month. The index registered 59.4 percent, a 5.1-percentage point decrease compared to the March reading of 64.5 percent. Of the total respondents in April, 44 percent indicated they do not measure backlog of orders. Respondent comments include: "Back orders are starting to improve slightly" and "Demand is outpacing supply." Also: "Supplier capacity constraints and labor shortages are delaying deliveries." The 11 industries reporting an increase in order backlogs in April — listed in order — are: Accommodation & Food Services; Agriculture, Forestry, Fishing & Hunting; Mining; Real Estate, Rental & Leasing; Utilities; Retail Trade; Professional, Scientific & Technical Services; Public Administration; Transportation & Warehousing; Health Care & Social Assistance; and Wholesale Trade. The only industry that reported a decrease in backlogs in April is Management of Companies & Support Services. Six industries reported no change in April.
New Export Orders Orders and requests for services and other non-manufacturing activities to be provided outside of the U.S. by domestically based companies grew in April for the third consecutive month after contracting in January for the first time in 12 months. The New Export Orders Index registered 58.1 percent, a 2.9-percentage point decrease from the 61 percent reported in March. Of the total respondents in April, 78 percent indicated they do not perform, or do not separately measure, orders for work outside of the U.S. The six industries reporting an increase in new export orders in April — listed in order — are: Real Estate, Rental & Leasing; Accommodation & Food Services; Educational Services; Utilities; Retail Trade; and Transportation & Warehousing. The four industries reporting a decrease in new export orders in April are: Mining; Management of Companies & Support Services; Information; and Wholesale Trade. Eight industries indicated no change in new export orders in April.
Imports The Imports Index grew in April after contracting in March, registering 52.9 percent, up 7.9 percentage points from March's figure of 45 percent. Eighty-one percent of respondents reported that they do not use, or do not track the use of, imported materials. The six industries reporting an increase in imports for the month of April — listed in order — are: Retail Trade; Accommodation & Food Services; Utilities; Professional, Scientific & Technical Services; Construction; and Health Care & Social Assistance. The three industries that reported a decrease in imports in April are: Mining; Other Services; and Transportation & Warehousing. Nine industries reported no change in imports in April.
Inventory Sentiment The ISM® Services Inventory Sentiment Index contracted in April for the 12th time in the last 13 months, registering 46.7 percent, a 6.5-percentage point increase from March's figure of 40.2 percent. This reading indicates that respondents feel their inventories are too low when correlated to business activity levels. The 11 industries reporting sentiment that their inventories were too high in April — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Arts, Entertainment & Recreation; Mining; Other Services; Finance & Insurance; Retail Trade; Educational Services; Transportation & Warehousing; Health Care & Social Assistance; Utilities; and Wholesale Trade. The seven industries reporting a feeling that their inventories were too low in April — listed in order — are: Real Estate, Rental & Leasing; Accommodation & Food Services; Construction; Public Administration; Management of Companies & Support Services; Professional, Scientific & Technical Services; and Information.
About This Report DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire U.S., while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of April 2022. 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 The Services ISM® Report On Business® (formerly the Non-Manufacturing ISM® Report On Business®) is based on data compiled from purchasing and supply executives nationwide. Membership of the Services Business Survey Committee (formerly Non-Manufacturing Business Survey Committee) is diversified by NAICS, based on each industry's contribution to gross domestic product (GDP). The Services Business Survey Committee responses are divided into the following NAICS code categories: Agriculture, Forestry, Fishing & Hunting; Mining; Utilities; Construction; Wholesale Trade; Retail Trade; Transportation & Warehousing; Information; Finance & Insurance; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Management of Companies & Support Services; Educational Services; Health Care & Social Assistance; Arts, Entertainment & Recreation; Accommodation & Food Services; Public Administration; and Other Services (services such as Equipment & Machinery Repairing; Promoting or Administering Religious Activities; Grantmaking; Advocacy; and Providing Dry-Cleaning & Laundry Services, Personal Care Services, Death Care Services, Pet Care Services, Photofinishing Services, Temporary Parking Services, and Dating Services). The data are weighted based on each industry's contribution to GDP. According to the BEA estimates for 2020 GDP (released December 22, 2021), the six largest services sectors are: Real Estate, Rental & Leasing; Government; Professional, Scientific, & Technical Services; Health Care & Social Assistance; Information; and Finance & Insurance. Beginning in February 2020 with January 2020 data, computation of the indexes is accomplished utilizing unrounded numbers. 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 50.1 percent, over time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 50.1 percent, it is generally declining. The distance from 50 percent or 50.1 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 The Institute for Supply Management® ("ISM") Report On Business® (Manufacturing, Services and Hospital reports) ("ISM ROB") contains information, text, files, images, video, sounds, musical works, works of authorship, applications, and any other materials or content (collectively, "Content") of ISM ("ISM ROB Content"). ISM ROB Content is protected by copyright, trademark, trade secret, and other laws, and as between you and ISM, ISM owns and retains all rights in the ISM ROB Content. ISM hereby grants you a limited, revocable, nonsublicensable license to access and display on your individual device the ISM ROB Content (excluding any software code) solely for your personal, non-commercial use. The ISM ROB Content shall also contain Content of users and other ISM licensors. Except as provided herein or as explicitly allowed in writing by ISM, you shall not copy, download, stream, capture, reproduce, duplicate, archive, upload, modify, translate, publish, broadcast, transmit, retransmit, distribute, perform, display, sell, or otherwise use any 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. You shall not either directly or through the use of any device, software, internet site, web-based service, or other means remove, alter, bypass, avoid, interfere with, or circumvent any copyright, trademark, or other proprietary notices marked on the Content or any digital rights management mechanism, device, or other content protection or access control measure associated with the Content including geo-filtering mechanisms. Without prior written authorization from ISM, you shall not build a business utilizing the Content, whether or not for profit. You shall not create, recreate, distribute, incorporate in other work, or advertise an index of any portion of the Content unless you receive prior written authorization from ISM. Requests for permission to reproduce or distribute ISM ROB Content can be made by contacting in writing at: ISM Research, Institute for Supply Management, 309 W. 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® Institute for Supply Management® (ISM®) serves supply management professionals in more than 90 countries. Its 50,000 members around the world manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 as the first supply management institute in the world, ISM is committed to advancing the practice of supply management to drive value and competitive advantage for its members, contributing to a prosperous and sustainable world. ISM leads the profession through the ISM Report On Business®, its highly regarded certification programs and the ISM Advance™ Digital Platform. This report has been issued by the association since 1931, except for a four-year interruption during World War II. 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 next Services ISM® Report On Business® featuring May 2022 data will be released at 10:00 a.m. ET on Friday, June 3, 2022. *Unless the New York Stock Exchange is closed.
SOURCE Institute for Supply Management 
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