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The business activity index is 69.8%; the new order index is 69.7%; the employment index is 51.6%; the supplier delivery index is 75.7%
Tempe, Arizona, November 3, 2021/PRNewswire/-Economic activity in the service industry grew for the 17th consecutive month in October-The rate of expansion reached a record high for the fourth time in 2021-United States said Purchasing and supply supervisor in the latest Services ISM® Report On Business®.
The report was released today by Anthony Nieves, Chairman of the Service Industry Survey Committee of the Institute for Supply Management® (ISM®), CPSM, CPM, APP, CFPM: "In October, the service industry PMI® reached a record high of 66.7 %, compared with 61.9 in September. % Is 4.8 percentage points higher. This figure exceeds the record high of 64.1% in July; previous records were set in May (64%) and March (63.7%). The data quickly explained the reasons for the increase in services Industry PMI® readings, as two of the four equally weighted sub-indices that directly affect the composite index, reached record highs: the business activity index reached 69.8%, an increase of 7.5 percentage points from 62.3% in September, and the new order index reached 69.7%, an increase of 6.2 percentage points from last month's 63.5% (the other two sub-indices are employment and supplier delivery, which were also in the expansion range in October).
"The supplier delivery index was 75.7%, an increase of 6.9 percentage points from 68.8% in September. The record high set in April 2020 was 78.3%. (Supplier delivery is the only ISM® Report On Business® index that has reversed ); a reading higher than 50% indicates a slower delivery speed, which is common when the economy improves and customer demand increases.)
"There is no sign of a slowdown in demand, which is reflected in the other two sub-indices in October. The order backlog index set a record of 67.3%, which is 5.4 percentage points higher than the 61.9% in September; the previous high of 65.8% was The price index set in June reached 82.9%, the second highest in history, up 5.4 percentage points from 77.5% in September, and only exceeded (83.5%) in September 2005. In response, the service industry is working hard. Stocking up, because the inventory index (42.2%, down 3.9 percentage points from 46.1% in September) and the inventory prosperity index (37.3%, down 9 percentage points from 46.3% in the previous month) approached historical lows in October.
Nieves continued, “According to the service industry PMI®, all 18 service industries reported growth. The composite index showed a 17th consecutive month of growth after two consecutive months of contraction in April and May 2020. In October, the service industry Continued strong growth. In the past 141 months, it has expanded at all but two months. However, ongoing challenges—including supply chain disruptions and labor and material shortages—are limiting capacity and affecting overall business conditions ."
Industry Performance The 18 service industries (listed in order) that reported growth in October are: retail; transportation and warehousing; real estate, leasing and leasing; arts, entertainment, and leisure; other services; utilities; construction; information; education services ; Wholesale trade; accommodation and catering services; medical care and social assistance; agriculture, forestry, fishing, and hunting; company management and support services; finance and insurance; professional, scientific and technical services; public management; and mining.
ISM® service survey results at a glance
Comparison of ISM® services and ISM® manufacturing surveys
Services ISM® Report On Business® data is seasonally adjusted for business activity, new orders, prices, and employment indices. Manufacturing ISM® Report On Business® data is seasonally adjusted for new orders, production, employment, and inventory indexes.
**The number of months moved in the current direction.
Commodity prices rise/fall, supply shortages
Commodity prices aluminum (4); aluminum products (2); beef (2); chemicals (2); chicken (2); bargaining chips; building contractors (4); copper; copper products (4); corrugated paper products ( 2); dairy products; diesel (11); electrical components (9); electronics (2); food (2); food and beverages (3); freight (6); fuel (10); gasoline (11); integrated Circuits; Labor (11); Labor-Construction (3); Labor-Temporary (10); Logistics Services (2); Metal; Metal Products; Natural Gas; Shipping (2); Pallets; Petroleum Products; Plastic Products (3) ; Polyethylene film products (2); polyvinyl chloride (PVC) products (2); resin-based products (4); security services; software licensing; software maintenance and support; steel; steel products (10); and transportation costs.
Commodity prices fell for timber (4).
Shortage of electrical goods; blood collection tubes (2); chickens (2); computer equipment (3); construction contractors (2); construction subcontractors (3); crutches; electrical components (2); integrated circuits; labor (3) ); labor-technology and network related; labor-temporary (10); laptops and desktop computers (3); microchips (3); needles and syringes (3); shipping containers (2); pallets; paper products; Pipettes (8); plastic tubes; plastics; portion control condiment packs; polyvinyl chloride (PVC) products; stainless steel products; steel products (2); transportation; and vacuum cleaners.
Note: After each item, indicate the number of consecutive months that the product has been on the market.
In October, the service industry PMI® recorded 66.7%, an increase of 4.8 percentage points from 61.9% in September. This is the highest reading of the index since its establishment in 2008. The 12-month average is 61.1%, reflecting strong demand in the service industry. The reading indicates that the service industry has grown for the 17th consecutive month after experiencing two months of contraction and the previous 122 months of growth. A reading above 50% indicates that the service industry economy is expanding in general; a reading below 50% indicates a general contraction in the service industry.
Over time, the service industry PMI® is higher than 49.2%, which usually indicates that the overall economy is expanding. Therefore, the service industry PMI® in October showed an expansion for the 17th consecutive month after two consecutive months of contraction and the previous 127 months of growth. Nieves said: "The past relationship between service industry PMI® and the overall economy shows that the service industry PMI® in October (66.7%) corresponds to an annualized growth of real gross domestic product (GDP) of 6.1%."
Business Activity ISM®'s business activity index hit a record high of 69.8% in October, an increase of 7.5 percentage points from 62.3% in September, and surpassed 69.4% in March, indicating the 17th consecutive month of growth. Respondents’ comments included: “Longer delivery times are driving more orders and more quantities” and “Working hard for the peak season”.
The 17 industries (listed in order) that reported an increase in business activity in October are: real estate, leasing and leasing; retail; information; transportation and storage; education services; public utilities; healthcare and social assistance; arts, entertainment, and leisure ; Mining; wholesale trade; finance and insurance; company management and support services; other services; construction; accommodation and catering services; professional, scientific and technical services; and public administration. The only industries that reported unchanged in October were agriculture, forestry, fishing and hunting.
The new orders index of ISM® reached a record 69.7%, an increase of 6.2 percentage points from 63.5% in September. The previous record high was 67.2% in March. After two months of contraction and 128 months of expansion, new orders increased for the 17th consecutive month. Respondents' comments included: "The increase in new business in our company's developing department" and "Pull orders to curb the impact of restraint."
The 16 industries (listed in order) that reported new order growth in October are: retail; transportation and warehousing; other services; real estate, leasing and leasing; utilities; information; company management and support services; accommodation and catering services; Arts, entertainment and leisure; health care and social assistance; wholesale trade; construction; education services; finance and insurance; professional, scientific and technical services; and public administration. No industry reported a decrease in new orders in October.
Employment activity in the employment service industry increased for the fourth consecutive month in October after shrinking in June. ISM®'s service industry employment index was 51.6% in October, a decrease of 1.4 percentage points from 53% in September. Respondents’ comments included: “Staffing and personnel mobility still face major challenges” and “Continuing difficulties in filling positions, especially on the front lines.” In addition, “the demand for drivers exceeds supply and the turnover rate has increased”.
The 12 industries (listed in order) where employment increased in October are: arts, entertainment, and leisure; agriculture, forestry, fishing, and hunting; transportation and storage; construction; retail; wholesale trade; education services; other services; information ; Public utilities; finance and insurance; and professional, scientific and technical services. The four industries where employment declined in October were corporate management and support services; public management; healthcare and social assistance; and accommodation and food services.
Supplier Delivery The Supplier Delivery Index was 75.7%, which was 6.9 percentage points higher than the 68.8% reported in September. This is the second highest reading since the index hit a record high of 78.3% in April 2020. A reading above 50% indicates a slower delivery speed, while a reading below 50% indicates a faster delivery speed. Respondents’ comments included: "lack of drivers and warehouse labor" and "capacity constraints, raw material shortages, labor shortages, and transportation delays."
The 17 industries (listed in order) where deliveries slowed in October were: real estate, leasing and leasing; retail; accommodation and catering services; construction; utilities; healthcare and social assistance; transportation and warehousing; education services; companies Management and support services; other services; agriculture, forestry, fishing, and hunting; wholesale trade; public administration; arts, entertainment, and leisure; professional, scientific, and technical services; information; and finance and insurance. There is no industry report that supplier deliveries will accelerate in October.
Inventory In October, the inventory index contracted for the fifth consecutive month. The 42.2% reading was 3.9 percentage points lower than the 46.1% reported in September. Of the total number of respondents in October, 39% said they had no inventory or did not measure it. Respondents’ comments included: "Trying to increase, but it is difficult to do because of availability and transportation" and "Due to cost, inflation is reducing inventory levels."
The six industries (listed in order) that increased inventory in October are: arts, entertainment, and leisure; accommodation and catering services; construction; education services; public utilities; and healthcare and social assistance. The six industries (listed in order) where inventories decreased in October were: real estate, leasing, and leasing; mining; retail; transportation and warehousing; professional, scientific, and technical services; and information. Compared with September, there were no changes in six industry reports in October.
Prices In October, the prices of materials and services paid by service industry institutions rose, with an index of 82.9%, which was 5.4 percentage points higher than the 77.5% in September. This is the highest reading since September 2005, when the index reached a record high of 83.5%.
All 18 service industries reported price increases paid in October, in the following order: arts, entertainment and leisure; real estate, leasing and leasing; company management and support services; wholesale trade; utilities; other services; public administration; transportation and Warehousing; education services; retail; information; construction; accommodation and catering services; agriculture, forestry, fishing, and hunting; professional, scientific and technical services; finance and insurance; mining; and healthcare and social assistance.
Note: The reported price increase and price decrease commodities are listed in the commodity section of this report.
Order Backlog The ISM® Service Order Backlog Index increased in October, the 16th time in the past 17 months. The index recorded a record 67.3%, an increase of 5.4 percentage points from the 61.9% reported in September. The previous record high was 65.8% in June. Among all respondents in October, 43% said they did not measure the backlog of orders.
The 14 industries (listed in order) where the order backlog increased in October are: agriculture, forestry, fishing, and hunting; accommodation and catering services; company management and support services; real estate, leasing and leasing; wholesale trade; utilities; healthcare And social assistance; information; professional, scientific and technical services; other services; transportation and storage; public administration; construction; and retail trade. One of the industries that reported a decrease in the backlog of orders in October was the mining industry.
New export orders In October, orders and demand for services and other non-manufacturing activities provided by domestic companies outside the United States increased for the ninth consecutive month. The new export order index was 62.3%, 2.8 percentage points higher than the 59.5% reported in September. Of all respondents in October, 75% said they either did not execute or did not separately measure work orders outside the United States
The eight industries (listed in order) where new export orders increased in October are: real estate, leasing and leasing; accommodation and catering services; construction; information; transportation and warehousing; wholesale trade; finance and insurance; and professional, science and technology service. The two industries where new export orders fell in October were: utilities; and education services. The exports of the eight industries have not changed.
Imports The import index in October increased after two consecutive months of contraction, reaching 53.3%, which was 5.6 percentage points higher than the 47.7% in September. 71% of respondents stated that they do not use or track the use of imported materials.
The six industries (listed in order) that reported an increase in imports in October were: retail trade; education services; finance and insurance; transportation and warehousing; construction; and wholesale trade. The two industries where imports fell in October were: healthcare and social assistance; and professional, scientific, and technical services. Ten industries reported that there was no change in imports in October.
Inventory Sentiment The ISM® Service Inventory Sentiment Index contracted for the seventh consecutive month in October, at 37.3%, which was 9 percentage points lower than the 46.3% in September. This reading is only 0.1 percentage point higher than the historical low of 37.2% set in June. This shows that when it comes to the level of business activity, respondents believe that their inventory is too low.
The report believes that the two industries with high inventories in October are: art, entertainment and leisure; and construction. The 10 industries (listed in order) that the report believes that inventory was too low in October are: real estate, leasing and leasing; retail; mining; professional, scientific and technical services; information; transportation and warehousing; public management; wholesale trade; public utilities Career; and medical care and social assistance. Compared with September, there were no changes in six industry reports in October.
Regarding this report, do not confuse this national report with various regional procurement reports issued nationwide. The information reported by the country reflects the entire United States, while the regional report mainly contains regional data from the local area. In addition, the information in the regional report is not used to calculate the results of the national report. The information compiled in this report applies to October 2021.
The data provided here comes from a survey of service industry supply executives, based on the information they have collected within their respective organizations. Except as described in this press release, ISM® does not make any statements about the data collection procedures of individual companies. When using this data in decision-making, it should be compared with all other sources of economic data.
Data and presentation methods Services ISM® Report On Business® (formerly non-manufacturing ISM® Report On Business®) is based on data compiled by national purchasing and supply managers. According to the contribution of each industry to the gross domestic product (GDP), the membership of the Service Industry Enterprise Survey Committee (formerly the Non-manufacturing Enterprise Survey Committee) is diversified by NAICS. The response of the Service Industry Enterprise Survey Committee is divided into the following NAICS code categories: agriculture, forestry, fishing, and hunting; mining; utilities; construction; wholesale trade; retail; transportation and storage; information; finance and insurance; real estate, leasing, and leasing ; Professional, scientific and technical services; company management and support services; educational services; health care and social assistance; arts, entertainment and leisure; accommodation and catering services; public management; and other services (equipment and machinery maintenance services; promotion or Manage religious activities; subsidize; promote; and provide dry cleaning and laundry services, personal care services, death care services, pet care services, printing services, temporary parking services, and dating services).
The survey response reflects the change (if any) of the current month compared to the previous month. For each indicator measured (business activity, new orders, order backlog, new export orders, inventory changes, inventory sentiment, imports, prices, employment, and supplier deliveries), the report shows the percentage and diffusion index of each response reported. The response represents the original data and will never change. The data is seasonally adjusted based on business activity, new orders, prices, and employment. When conditions permit, all seasonal adjustment factors will undergo relatively small changes every year. The other indexes did not show obvious seasonality.
The service industry PMI® is a composite index based on the diffusion index of four equal weight indicators: business activity (seasonally adjusted), new orders (seasonally adjusted), employment (seasonally adjusted), and supplier delivery. The diffusion index has the characteristics of a leading indicator and is a convenient summary measure that reflects the current direction and range of change. An index above 50% indicates that the service economy is expanding in general; an index below 50% indicates an overall downward trend. Supplier delivery is an exception. A supplier delivery index higher than 50% means slower delivery, and lower than 50% means faster delivery.
Over time, the service industry PMI® is higher than 49.2%, indicating that the overall economy or gross domestic product (GDP) is expanding as a whole; if it is lower than 49.2%, it is showing an overall downward trend. The distance from 50% or 49.2% indicates the strength of expansion or decline.
The Services ISM® Report On Business® survey will be sent to the service industry business survey committee respondents in the first part of each month. Respondents were asked to report only the U.S. business for the current month. ISM® receives survey responses most of the time in any given month, and most respondents usually wait until the end of the month to submit a response to get the most accurate understanding of current business activities. ISM® then compiles the report and publishes it on the third business day of the next month.
Industries reporting growth, as shown in the Services ISM® Report On Business® monthly report, are listed in order of fastest to slowest growth. For industries reporting shrinkage or reduction, they are ranked from the highest level of shrinkage/reduction to the lowest level of shrinkage/reduction.
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About the Institute of Supply Management® Institute of Supply Management® (ISM®) provides services to supply management professionals in more than 90 countries. Its 50,000 members worldwide manage approximately US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915, ISM is the world's first supply management school, dedicated to advancing supply management practices, creating value and competitive advantages for its members, and contributing to a prosperous and sustainable world. ISM leads the industry through the ISM Report On Business®, its highly regarded certification program and the ISM AdvanceTM digital platform. The report has been issued by the association since 1931, but was interrupted for four years during World War II.
The full text version of Services ISM® Report On Business® will be posted on the ISM® website www.ismrob.org on the third business day of each month* after 10:00 AM Eastern Time.
The next Services ISM® Report On Business® with data for November 2021 will be released on Friday, December 3, 2021 at 10:00 AM Eastern Time.
*Unless the New York Stock Exchange is closed.
SOURCE Supply Management Institute
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