Services sector index climbed to new high in July
The Institute for Supply Management’s non-manufacturing survey has hit its highest reading ever, climbing as respondents indicated either improving market conditions or stabilization that has positively affected many of their industries and businesses.
The non-manufacturing survey, which measures the vast service sector, registered a 58.7% in July, up from 56% the prior month and also above the 56.5% estimate projected by observers polled by Bloomberg News. It was the highest reading for the index since its inception in January 2008, when ISM began calculating a composite index for the non-manufacturing sector. That index is based on four indicators: business activity, new orders, employment and supplier deliveries.
A reading above 50% indicates the non-manufacturing sector economy is generally expanding, while any figure below that number suggests general contraction, according to ISM.
ISM reported growth across many of the non-manufacturing surveys it tracks, including a 4.9 percentage point gain for business activity/production. New orders, employment and imports were also higher. Inventories dipped a bid, as did the surveys for prices and inventory sentiment.
The business activity index reached its highest level since February 2011. ISM said the only industry to report a decline in business activity in July was utilities. Meanwhile, the new orders index grew 3.7 percentage points to 64.9%, the highest reading for that reading since August 2005.