The
Institute for Supply Management (ISM) reported on Wednesday that its
non-manufacturing index (NMI) came in at 66.7 in October, which was 4.8
percentage points higher than the unrevised September’s reading of 61.9 percent. The latest reading pointed to the
growth in the services sector for the 17th straight month, which was also the
fastest on record.
Economists
forecast the index to edge up to 62.0 last month. A reading above 50 signals
expansion, while a reading below 50 indicates contraction.
All 18 services industries reported gains
last month, the ISM said, even though ongoing challenges, including supply
chain disruptions and shortages of labor and materials, continued to constrain
capacity and impact overall business conditions.
According
to the report, the ISM’s non-manufacturing Production measure surged 7.5
percentage points to 69.8 percent from the September reading and its New Orders
gauge jumped 6.2 percentage points to 69.7 percent, setting their all-time
highs. In addition, the Supplier Deliveries index climbed 6.9 percentage points
to 75.7 percent (its all-time high is 78.3 percent, recorded in April 2020). At
the same time, the Employment indicator decreased 1.4 percentage points to 51.6
percent, and the Inventories indicator declined 3.9 percentage points to 42.2
percent. On the price front, the Prices index rose 5.4 percentage points to 82.9
percent, recording its second-highest reading ever, behind September 2005.
Commenting
on the data, the Chair of the ISM Services Business Survey Committee, Anthony
Nieves, noted, “The past relationship between the Services PMI and the overall
economy indicates that the Services PM for October (66.7 percent)
corresponds to a 6.1-percent increase in real gross domestic product (GDP) on
an annualized basis."