ISM Services PMI Grew to 9-Month High

The Institute of Supply Management (ISM) has released its May services purchasing managers' index (PMI). The headline composite index is at 53.8, surpassing the 51.0 forecast. The latest reading is the highest level for the index in the past nine months and moves the index back into expansion territory after one month in contraction territory.

Here is an excerpt from the report summary:

Nieves continues, “The increase in the composite index in May is a result of notably higher business activity, faster new orders growth, slower supplier deliveries and despite the continued contraction in employment. Survey respondents indicated that overall business is increasing, with growth rates continuing to vary by company and industry. Employment challenges remain, primarily attributed to difficulties in backfilling positions and controlling labor expenses. The majority of respondents indicate that inflation and the current interest rates are an impediment to improving business conditions.”

Unlike its much older kin, the ISM manufacturing series, there is relatively little history for ISM's non-manufacturing data, especially for the headline composite Index, which dates from 2008. The chart below shows the non-manufacturing composite.

ISM Services PMI