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Services PMI® at 51.4%; March 2024 Services ISM® Report On Business®Business Activity Index at 57.4%; New Orders Index at 54.4%; Employment Index at 48.5%; Supplier Deliveries Index at 45.4% TEMPE, Ariz., April 3, 2024 /PRNewswire/ -- Economic activity in the services sector expanded in March for the 15th consecutive month as the Services PMI® registered 51.4 percent, say the nation's purchasing and supply executives in the latest Services ISM® Report On Business®. The sector has grown in 45 of the last 46 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 March, the Services PMI® registered 51.4 percent, 1.2 percentage points lower than February's reading of 52.6 percent. The composite index indicated growth in March for the 15th consecutive month after a reading of 49 percent in December 2022, which was the first contraction since May 2020 (45.4 percent). The Business Activity Index registered 57.4 percent in March, which is 0.2 percentage point higher than the 57.2 percent recorded in February. The New Orders Index expanded in March for the 15th consecutive month after contracting in December 2022 for the first time since May 2020; the figure of 54.4 percent is 1.7 percentage points lower than the February reading of 56.1 percent. The Employment Index contracted for the third time in four months with a reading of 48.5 percent, a 0.5-percentage point increase compared to the 48 percent recorded in February. "The Supplier Deliveries Index registered 45.4 percent, 3.5 percentage points lower than the 48.9 percent recorded in February. The index continued in contraction for the second straight month — indicating that supplier delivery performance was faster — after one month in expansion (or 'slower') territory in January. In the last 12 months, the average reading of 48.7 percent (with a low of 45.4 percent this month) 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 53.4 percent in March, a 5.2-percentage point decrease from February's reading of 58.6 percent. The Inventories Index contracted in March for the fourth consecutive month, registering 45.6 percent, a decrease of 1.5 percentage points from February's figure of 47.1 percent. The Inventory Sentiment Index (55.7 percent, down 1 percentage point from February's reading of 56.7 percent) expanded for the 11th consecutive month. The Backlog of Orders Index dropped into contraction in March after two consecutive months of expansion, registering 44.8 percent, a 5.5-percentage point decrease compared to the February reading of 50.3 percent. "Twelve industries reported growth in March. The Services PMI®, by being above 50 percent for the 15th consecutive month (after a single month of contraction in December 2022 and a prior 30-month period of expansion), continues to indicate sustained growth — but at a slower rate in March — for the sector." Nieves continues, "The decrease in the rate of growth in March and the decline in the composite index is a result of slower new orders growth, faster supplier deliveries and a contraction in employment. The report continued to reflect growth month over month. Respondents indicated continuing improvement in logistics and the supply chain. Employment challenges remain a combination of difficulties in backfilling positions and/or controlling labor expenses. The Prices Index reflected its lowest reading since March 2020, when the index registered 50.4 percent; however, respondents indicated that even with some prices stabilizing, inflation is still a concern." 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. MARCH 2024 SERVICES INDEX SUMMARIES Services PMI® A Services PMI® above 49 percent, over time, generally indicates an expansion of the overall economy. Therefore, the March Services PMI® indicates the overall economy is growing for the 15th 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 March (51.4 percent) corresponds to a 0.8-percent increase in real gross domestic product (GDP) on an annualized basis." SERVICES PMI® HISTORY
Business Activity The 12 industries reporting an increase in business activity for the month of March — listed in order — are: Accommodation & Food Services; Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Educational Services; Retail Trade; Management of Companies & Support Services; Utilities; Professional, Scientific & Technical Services; Wholesale Trade; Public Administration; Construction; and Health Care & Social Assistance. The two industries reporting a decrease in business activity for the month of March are: Mining; and Transportation & Warehousing.
New Orders The 11 industries reporting an increase in new orders for the month of March — listed in order — are: Professional, Scientific & Technical Services; Wholesale Trade; Retail Trade; Accommodation & Food Services; Agriculture, Forestry, Fishing & Hunting; Other Services; Educational Services; Utilities; Finance & Insurance; Construction; and Health Care & Social Assistance. The two industries reporting a decrease in new orders for the month of March are: Mining; and Public Administration.
Employment The six industries reporting an increase in employment in March — listed in order — are: Accommodation & Food Services; Construction; Public Administration; Utilities; Health Care & Social Assistance; and Educational Services. The five industries reporting a decrease in employment in March are: Mining; Finance & Insurance; Retail Trade; Transportation & Warehousing; and Information. Seven industries indicated no change in employment in March.
Supplier Deliveries The four industries reporting slower deliveries in March are: Management of Companies & Support Services; Construction; Professional, Scientific & Technical Services; and Health Care & Social Assistance. The 12 industries reporting faster supplier deliveries for the month of March — listed in order — are: Real Estate, Rental & Leasing; Mining; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Transportation & Warehousing; Wholesale Trade; Retail Trade; Public Administration; Information; Finance & Insurance; Educational Services; and Utilities.
Inventories The three industries reporting an increase in inventories in March are: Public Administration; Transportation & Warehousing; and Utilities. The seven industries reporting a decrease in inventories in March, in order, are: Real Estate, Rental & Leasing; Mining; Agriculture, Forestry, Fishing & Hunting; Information; Construction; Management of Companies & Support Services; and Wholesale Trade. Eight industries reported no change in inventories in March.
Prices Thirteen services industries reported an increase in prices paid during the month of March, in the following order: Construction; Agriculture, Forestry, Fishing & Hunting; Health Care & Social Assistance; Public Administration; Wholesale Trade; Other Services; Professional, Scientific & Technical Services; Information; Utilities; Retail Trade; Finance & Insurance; Educational Services; and Transportation & Warehousing. The two industries reporting a decrease in prices for March are: Real Estate, Rental & Leasing; and Management of Companies & Support Services.
NOTE: Commodities reported as up in price and down in price are listed in the commodities section of this report. Backlog of Orders The six industries reporting an increase in order backlogs in March, in order, are: Retail Trade; Agriculture, Forestry, Fishing & Hunting; Educational Services; Construction; Finance & Insurance; and Utilities. The eight industries reporting a decrease in order backlogs in March — in the following order —are: Other Services; Real Estate, Rental & Leasing; Public Administration; Management of Companies & Support Services; Information; Professional, Scientific & Technical Services; Wholesale Trade; and Health Care & Social Assistance.
New Export Orders The five industries reporting an increase in new export orders in March are: Professional, Scientific & Technical Services; Transportation & Warehousing; Educational Services; Information; and Wholesale Trade. The two industries reporting a decrease in new export orders in March are: Real Estate, Rental & Leasing; and Accommodation & Food Services. Eleven industries reported no change in new export orders in March.
Imports The six industries reporting an increase in imports for the month of March, in order, are: Accommodation & Food Services; Agriculture, Forestry, Fishing & Hunting; Retail Trade; Management of Companies & Support Services; Utilities; and Wholesale Trade. The two industries reporting a decrease in imports in March are: Educational Services; and Professional, Scientific & Technical Services. Ten industries reported no change in imports in March.
Inventory Sentiment The nine industries reporting sentiment that their inventories were too high in March — listed in order — are: Other Services; Utilities; Wholesale Trade; Information; Construction; Mining; Health Care & Social Assistance; Public Administration; and Retail Trade. The two industries reporting a feeling that their inventories were too low in March are: Transportation & Warehousing; and Professional, Scientific & Technical Services. Six industries indicated no change in inventory sentiment in March.
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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