- Lowest since Dec 2022
- Prior was 51.4
Key details:
- Employment 45.9 vs 48.5 prior
- New orders 52.2 vs 54.4 last month
- Prices paid 59.2 vs 53.4 last month
Other components:
- Inventories 53.7 vs 45.6 last month
- Supplier deliveries 48.5 versus 45.4 last month
- Backlog of orders 51.1 versus 44.8 last month
- New export orders 47.9 versus 52.7 last month.
- Imports 53.6 versus 52.4 last month
- Inventory sentiment 62.9 versus 55.7 last month
The prior report saw a big drop in the prices paid component so I don't view the rebound as a big shock as it goes back to where it's spent most of the past year. In addition, inflation is a lagging indicator while demand is a leading indicator. This is the lowest ISM services since Dec 2022 and the third month in a row of a declining index.
Comments in the report:
- “Steady improvement toward lower costs in food and beverages; however, avian bird flu may affect pricing moving forward. Already seeing increases in chicken and eggs. In the technology space, prices are not decreasing but holding steady.” [Accommodation & Food Services]
- “Movie production is recovering, which should increase volume in movie theaters in the second half of 2024.” [Arts, Entertainment & Recreation]
- “Although it varies by global region, we’re starting to see market softening in terms of price and lead time stability. That bidders are providing reasonable bid validities is an indication that much of the supply chain is coming into supply and demand equilibrium. Electrical equipment remains the outlier.” [Construction]
- “Inflation is raising our unit cost on products and services when compared to last year’s expenditures.” [Public Administration]
- “Continue to be challenged with inflationary pressure through labor and service cost increases, but we are working hard at finding utilization savings to offset where possible.” [Health Care & Social Assistance]
- “Business remains soft.” [Information]
- “We are still experiencing supply chain challenges with increased costs of raw materials, particularly chemicals and their containers, as well as higher U.S. and overseas freight transportation costs. A containers shortage has increased costs and slowed down the supply chain.” [Management of Companies & Support Services]
- “Steady demand has been favorable during this traditionally slower season. Pricing is stable and the supply chain is strong. Employee recruitment and retention has been a challenge in some areas; however, the situation isn’t critical.” [Retail Trade]
- “Construction, administrative and technical/scientific labor are in high demand. Long lead times for brass plumbing fittings and electrical equipment and components.” [Utilities]
- “The overall market has definitely slowed down. Our business is up year over year and month over month; based on our advanced analytics, we know that growth is coming from new customers. This means we are taking market share from our competitors.” [Wholesale Trade]
