The Institute
for Supply Management (ISM) announced on Wednesday that its Services PMI came
in at 52.1 per cent in November, registering a drop of 3.9 percentage points
from an unrevised October reading of 56.0
per cent. The latest figure
indicated that economic activity in the U.S. services sector grew for the fifth
successive month in November, albeit at a slower pace than in the previous two months.
Economists had expected
the indicator to slip to 55.5 in November.
A reading above
50 signals expansion, while a reading below 50 indicates contraction.
According to
the report, the Production index declined by 3.5 percentage points to 53.7 per
cent last month but remained in expansion territory, suggesting the fifth month
of growth in production across the services sector. In addition, the New Orders
gauge fell by 3.7 percentage points to 53.7 per cent, indicating new orders increased
for the fifth consecutive month. The Employment measure dropped by 1.5
percentage points to 51.5 per cent, suggesting employment activity in the
services sector expanded in November for the second straight month. Elsewhere,
the Supplier Deliveries indicator plunged by 6.9 percentage points to 49.5 per
cent, implying faster delivery performance for the first time in three months. The
Inventories indicator tumbled by 11.3 percentage points to 45.9 per cent, returning
to contraction territory for the first time in four months. On the price front, the Prices index edged up 0.1 percentage
point to 58.2 per cent, indicating that prices paid by services organizations for materials and
services increased in October for the 90th month running.
Commenting on
the data, Steve Miller, Chair of the Institute for Supply Management (ISM)
Services Business Survey Committee, noted that 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,” he
added, admitting that election ramifications and tariffs were mentioned often,
with cautionary outlooks related to the potential impact on respondents'
specific industries.