Services PMI™ at 56.6%
Economic activity in the services sector grew in October for the fifth month in a row, say the nation’s purchasing and supply executives in the latest Services ISM® Report On Business®.
The Services PMI™ registered 56.6 percent. The Prices Index figure of 63.9 percent is 4.9 percentage points higher than the September reading of 59 percent, indicating that prices increased in October at a faster rate. The composite index indicated growth for the fifth consecutive month after a two month contraction in April and May. There has been a slight pull back in the rate of growth in the Services Sector in the month of October. Respondents’ comments are cautiously optimistic about business conditions and the economy. There is a degree of uncertainty due to the pandemic, capacity constraints, logistics and the elections.
The 16 services industries reporting growth in October — listed in order — are: Transportation & Warehousing; Construction; Accommodation & Food Services; Health Care & Social Assistance; Agriculture, Forestry, Fishing & Hunting; Educational Services; Finance & Insurance; Management of Companies & Support Services; Wholesale Trade; Mining; Professional, Scientific & Technical Services; Utilities; Retail Trade; Real Estate, Rental & Leasing; Information; and Other Services.
In October, the Services PMI™ (formerly the Non-Manufacturing NMI®) registered 56.6 percent, 1.2 percentage points lower than September’s figure of 57.8 percent. The reading indicates the services sector grew for the fifth consecutive month after two months of contraction and 122 months of growth before that. A reading above 50 percent indicates the services sector economy is generally expanding; below 50 percent indicates the services sector is generally contracting. The past relationship between the Services PMI™ and the overall economy indicates that the Services PMI™ for October (56.6 percent) corresponds to a 2.7-percent increase in real gross domestic product (GDP) on an annualized basis.