Economic activity in the services sector expanded for the fifth consecutive month in November, according to the Institute for Supply Management’s (ISM) latest Services ISM Report On Business. The Services PMI registered 52.1%, indicating expansion for the 51st time in 54 months since recovery from the coronavirus pandemic-induced recession began in June 2020.
The report was issued by Steve Miller, chair of the ISM services business survey committee:
“In November, the services PMI registered 52.1%, 3.9 percentage points lower than October’s figure of 56%. The reading in November marked the ninth time the composite index has been in expansion territory this year,” Miller said. “The business activity index registered 53.7% in November, 3.5 percentage points lower than the 57.2% recorded in October, indicating a fifth month of expansion after a contraction in June. The new orders index also recorded a reading of 53.7% in November, 3.7 percentage points lower than October’s figure of 57.4%. The employment index landed in expansion territory for the fourth time in five months; the reading of 51.5% is a 1.5-percentage point decrease compared to the 53% recorded in October.”
“The supplier deliveries index registered 49.5%, 6.9 percentage points lower than the 56.4% recorded in October. The index was in contraction territory for the sixth time in 2024 — indicating faster supplier delivery performance — after two months in expansion or ‘slower’ territory. (Supplier Deliveries is the only ISM Report On Business index that is inversed; a reading of above 50% indicates slower deliveries, which is typical as the economy improves and customer demand increases.),” Miller said. “The prices index registered 58.2% in November, a 0.1-percentage point increase from October’s reading of 58.1%. The inventories index returned to contraction territory in November after three months in expansion, registering 45.9%, a decrease of 11.3 percentage points from October’s figure of 57.2%. The inventory sentiment index expanded for the 19th consecutive month, registering 54.6%, up 1.6 percentage points from October’s reading of 53%. The backlog of orders index remained in contraction territory for a fourth consecutive month, registering 47.1% in November, a 0.6-percentage point decrease from the October reading of 47.7%.”
“Fourteen industries reported growth in November, matching the previous month’s total. The services PMI has expanded in 21 of the last 23 months dating back to January 2023, and the November reading is 0.2 percentage point below its average of 52.3% for 2024,” Miller said. “The decrease in the services PMI in November was driven by decreases in each of the four directly impacting subindexes (business activity, new orders, employment and supplier deliveries). However, 14 industries reported business activity growth, and 13 indicated new orders expansion; both figures are improvements compared to October. This reinforces the view over the last several months that the services sector has returned to sustained growth. Generally, respondents’ comments were neutral to positive, and both positive and negative impacts were attributed to seasonality. Not surprisingly, election ramifications and tariffs were mentioned often, with cautionary outlooks related to the potential impact on respondents’ specific industries.”
The 14 services industries reporting growth in November — listed in order — are:
- Accommodation and food services
- Arts, entertainment and recreation
- Health care and social assistance
- Wholesale trade
- Agriculture, forestry, fishing and hunting
- Public administration
- Finance and insurance
- Management of companies and support services
- Retail trade
- Transportation and warehousing
- Information
- Professional, scientific and technical services
- Construction
- Utilities
The three industries reporting a contraction in the month of November are:
- Mining
- Real estate
- Rental and leasing; and educational services
