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Economic news
03.10.2024

U.S. services sector activity grows significantly in September - ISM

The Institute for Supply Management (ISM) announced on Thursday that its Services PMI came in at 54.9 per cent in September, recording a climb of 3.4 percentage points from an unrevised August reading of 51.5 per cent. The latest figure indicated that economic activity in the U.S. services sector expanded at the strongest pace since February 2023.

Economists had expected the indicator to increase to 51.7 in September.

A reading above 50 signals expansion, while a reading below 50 indicates contraction.

According to the report, the Production index surged by 6.6 percentage points to 59.9 per cent in September, marking the third month of growth in production across the services sector. In addition, the New Orders gauge soared by 6.4 percentage points to 59.4 per cent, suggesting new orders grew for the third consecutive month. The Inventories indicator jumped by 5.2 percentage points to 58.1 per cent, remaining in expansion territory for the second month in a row. The Supplier Deliveries indicator increased by 2.5 percentage points to 52.1 per cent, indicating slower performance for the first time in three months. Meanwhile, the Employment measure declined 2.1 percentage points to 48.1 per cent, indicating employment activity in the services sector reduced in September for the first time in three months. On the price front, the Prices index rose by 2.1 percentage points to 59.4 per cent, indicating that prices paid by services organizations for materials and services increased in September for the 88th month running.

Commenting on the data, Steve Miller, Chair of the Institute for Supply Management (ISM) Services Business Survey Committee, noted that stronger growth indicated by the index data was generally supported by panellists' comments but concerns over political uncertainty were more prevalent than last month. He also added that pricing of supplies remains an issue with supply chains continuing to stabilize and one respondent voiced concern over potential port labour issues. “The interest-rate cut was welcomed; however, labour costs and availability continue to be a concern across most industries," Miller added.

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