Services PMI^® at 54%

Economic activity in the services sector continued to expand in June, say the nation’s purchasing and supply executives in the latest ISM® Services PMI® Report. 

The Services PMI^® registered 54 percent, the 24th consecutive month in expansion territory. The Business Activity Index remained in expansion territory in June, decreasing 2.3 percentage points to 55.4 percent from May’s reading of 57.7 percent. The New Orders Index registered 55.1 percent, 2.2 percentage points below May’s figure of 57.3 percent. The Employment Index expanded for the first time in four months with a reading of 51.2 percent, a 3.3-percentage point increase from the 47.9 percent recorded in May. All of the four subindexes that make up the composite PMI^® were above their 12-month moving averages. The Prices Index decreased to 67.7 percent in June, 3.6 percentage points below May’s figure of 71.3 percent and its first time below 70 percent since February.

The 14 services industries reporting growth in June — listed in order — are: Arts, Entertainment & Recreation; Mining; Wholesale Trade; Transportation & Warehousing; Finance & Insurance; Accommodation & Food Services; Retail Trade; Other ServicesΧ; Professional, Scientific & Technical Services; Health Care & Social Assistance; Information; Construction; Utilities; and Real Estate, Rental & Leasing. The four industries reporting a contraction in the month of June are: Agriculture, Forestry, Fishing & Hunting; Educational Services; Management of Companies & Support Services; and Public Administration.

In June, the Services PMI^® registered 54 percent, 0.9 percentage point above its 12-month moving average of 53.1 percent. A reading above 50 percent indicates the services sector economy is generally expanding; below 50 percent indicates it is generally contracting. The past relationship between the Services PMI® and the overall economy indicates that the Services PMI^® for June (54 percent) corresponds to a 1.9-percentage point increase in real gross domestic product (GDP) on an annualized basis.

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Commodities Reported

Commodities Up in Price: Aluminum (4); Aluminum Products; Beef; Computers and Related Items (2); Conductor Cable; Copper (7); Diesel* (4); Electrical Components; Food Products (2); Fuel* (5); Gasoline* (5); Heating, Ventilation and Air Conditioning (HVAC) Equipment (2); House Wraps; Insurance (2); Labor (11); Labor — Consulting; Labor — Technical; Lumber; Lumber — Plywood; Memory Products (6); Oriented Strand Board (OSB); Petroleum Based Products (2); Plastics; Software — Licensing (5); Software — Maintenance/Support (3); Soybean Oil (2); Steel Products (3); and Transportation (4).

Commodities Down in Price: Diesel*; Fuel*; and Gasoline*. 

Commodities in Short Supply: Computers and Related Items (2); Electronic Components (5); Labor; Memory Components (6); Software Licensing; Steel Products; Switchgear; Transformers; and Wire and Cable.