U.S. ISM Services PMI Rebounds in November
Summary
- 52.7 in Nov. vs. 51.8 in Oct., showing continued expansions in services since Jan. ’23.
- Indexes for Business Activity (55.1), Employment (50.7), and Supplier Deliveries (49.6) rebound in Nov., while New Orders Index holds steady (55.5).
- Prices Index eases to 58.3, albeit remaining above 50 since June ’17.
The U.S. ISM Services PMI rose to 52.7 in November after declining to 51.8 in October, according to today’s report by the Institute for Supply Management, indicating expansion for the 11th straight month at a faster pace. The November reading, while up from a low of 49.2 in December 2022, was below 55.5 in November 2022 and a peak of 67.6 in November 2021. The 12-month average was 52.7, reflecting strong growth in the U.S. services sector. The Action Economics Forecast Survey had expected 52.2 for November.
Haver Analytics constructs a composite index combining the services index and the manufacturing reading. This index rebounded to 51.9 in November from 51.2 in October, showing expansion for the sixth successive month at a slightly faster rate. These readings remained down from 54.7 in November 2022 and a record 66.8 in November 2021. These series date back to July 1997.
In the latest services survey, the business activity index rebounded to 55.1 in November from 54.1 in October, indicating business activity expanded for the 42nd consecutive month at a faster pace. The index was below 61.6 in November 2022 and a record 70.4 in November 2021. An increased 24.6% of respondents (NSA) reported higher activity in November while a lessened 12.6% reported an activity decline. The employment index increased to 50.7 in November after falling to 50.2 in October, showing employment activity in the services sector expanded for the sixth straight month at a slightly faster rate. The latest reading was marginally higher than 50.6 in November last year. A 14.3% of respondents (NSA) indicated higher employment in November while a lessened 13.8% reported a decline.
Meanwhile, the new orders index was unchanged at 55.5 in November, indicating expansion in new orders for the 11th successive month. The index, while up from a low of 45.2 in December 2022, was below 55.8 in November 2022 and a record 69.2 in October 2021. An increased 25.4% of respondents (NSA) reported higher orders in November while a lessened 13.9% reported a decline.
The supplier deliveries index (NSA) increased to 49.6 in November after dropping to 47.5 in October, remaining below 50 for the second consecutive month. The index, while up from a low of 45.8 in March, was below 53.8 in November 2022 and a high of 75.7 in November 2021. An increased 10.5% of respondents (NSA) reported faster delivery speeds in November while 9.6% reported slower speeds.
On the inflation front, the prices index slipped to 58.3 in November from 58.6 in October, indicating prices paid by services organizations for materials and services had risen (i.e., above 50) since June 2017. The latest reading was up from a low of 54.1 in June but meaningfully below 70.1 in November 2022 and a record 84.5 in December 2021. A 22.3% of respondents (NSA) reported price rises in November while 9.5% reported price decreases.
Additionally, the new export orders index rose to 53.6 in November after plunging to a contraction-level 48.8 in October, indicating new export orders expanded for the seventh time in eight months. The inventory change index recovered to 55.4 in November from a contraction-level 49.5 in October, indicating inventories expanded for the sixth time in seven months. The inventory sentiment index jumped to 62.2 in November after declining to 54.4 in October, showing expansion for the seventh straight month at the highest pace since April 2020. In contrast, the imports index fell to 53.7 in November after jumping to 60.0 in October, registering the eighth successive expansion but at a slower pace. The backlog of orders index declined to 49.1 in November after rising to 50.9 in October, showing contraction for the third time in four months. These series are not seasonally adjusted and not included in the ISM Services PMI total.
The ISM Services PMI is a composite index consisting four equally weighted diffusion indexes (25% each): Business Activity, New Orders, Employment, and Supplier Deliveries. A reading above 50 indicates expansion in the services sector; below 50 suggests contraction. Supplier Deliveries is the only ISM index that is inversed; a reading above 50 indicates slower deliveries. The ISM figures are available in Haver’s USECON database, with additional detail in the SURVEYS database. The expectations figure from Action Economics is in the AS1REPNA database.
Winnie Tapasanun
AuthorMore in Author Profile »Winnie Tapasanun has been working for Haver Analytics since 2013. She has 20+ years of working in the financial services industry. As Vice President and Economic Analyst at Globicus International, Inc., a New York-based company specializing in macroeconomics and financial markets, Winnie oversaw the company’s business operations, managed financial and economic data, and wrote daily reports on macroeconomics and financial markets. Prior to working at Globicus, she was Investment Promotion Officer at the New York Office of the Thailand Board of Investment (BOI) where she wrote monthly reports on the U.S. economic outlook, wrote reports on the outlook of key U.S. industries, and assisted investors on doing business and investment in Thailand. Prior to joining the BOI, she was Adjunct Professor teaching International Political Economy/International Relations at the City College of New York. Prior to her teaching experience at the CCNY, Winnie successfully completed internships at the United Nations. Winnie holds an MA Degree from Long Island University, New York. She also did graduate studies at Columbia University in the City of New York and doctoral requirements at the Graduate Center of the City University of New York. Her areas of specialization are international political economy, macroeconomics, financial markets, political economy, international relations, and business development/business strategy. Her regional specialization includes, but not limited to, Southeast Asia and East Asia. Winnie is bilingual in English and Thai with competency in French. She loves to travel (~30 countries) to better understand each country’s unique economy, fascinating culture and people as well as the global economy as a whole.
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