Economic activity in the services sector grew in May for the 12th month in a row, with the Services PMI reached another all-time high in May, registering 64%, which is 1.3 percentage points higher than April’s reading of 62.7%, the Institute for Supply Management reports. The previous record high was 63.7% percent in March. The services sector has expanded for all but two of the last 136 months.
“The Prices Index registered 80.6%, which is 3.8 percentage points higher than the April reading of 76.8%, indicating that prices increased in May, and at a faster rate. The last time the Prices Index was this elevated was when it registered 77.4% in July 2008; the all-time high is 83.5% in September 2005,” said Anthony Nieves, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee.
“The Supplier Deliveries Index registered 70.4%, up 4.3 percentage points from April’s reading of 66.1%. (Supplier Deliveries is the only ISM Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)
“According to the Services PMI, all 18 services industries reported growth. The composite index indicated growth for the 12th consecutive month after a two-month contraction in April and May 2020. There was continued growth in the services sector in May. The rate of expansion is very strong, as businesses have reopened and production capacity has increased. However, some capacity constraints, material shortages, weather-related delays, and challenges in logistics and employment resources continue,” says Nieves.