- Business activity index 57.4 vs 54.4 prior
- Employment 50.3 vs 52.0 prior
- New orders 53.1 vs 57.9 prior
- Prices paid 66.6 vs 64.3 prior
- Supplier deliveries 54.2 vs 51.8 prior
- Inventories 45.1 vs 54.1 prior
- Backlog of orders 44.0 vs 42.6 prior
- New export orders 45.0 vs 54.2 prior
- Imports 48.2 vs 50.3 prior
- Inventory sentiment 54.3 vs 54.1 prior
The December reading was the highest since October 2024 and this is a small dip.
Earlier, the US S&P Global services final index for January 52.7 compared to the 52.5 prelim reading. On Monday, the ISM manufacturing index jumped by the most since 2020 and the market has taken it to heart with 'old economy' stocks rallying all week. It's something I've written about several times and a theme I think is worth thinking about as money rotates out of things like software and into things with lower valuations.
Comments in the report:
- “The uncertainty of U.S. tariff policies continues to affect our purchasing. The proliferation of AI is affecting how we purchase services, particularly getting more value out of service contracts and taking a harder look at risk.” [Accommodation & Food Services]
- “Pending surge in new capital investments of our customers, specifically in data centers, combined cycle power, and nuclear market sectors. Expect significant business growth in 2026, both in the domestic U.S. and globally.” [Construction]
- “Our business has stayed pretty consistent over the past few months.” [Finance & Insurance]
- “AI data center construction is expected to cause constraints in the IT market and availability. We haven’t seen delays on IT equipment yet but expect them in the coming months.” [Health Care & Social Assistance]
- “Still slow but more optimistic.” [Management of Companies & Support Services]
- “Overall business is slow coming out of the end of year and holidays.” [Other Services]
- “Supply chain is steady. Prices are leveling off.” [Public Administration]
- “Solid holiday performance across most units. January is even better. Consumers are still buying discretionary goods.” [Retail Trade]
- “Typical slow start. A lot of busy activity quoting, reports and the like.” [Transportation & Warehousing]
- “Data centers are causing large spikes in requirements. Suppliers are challenged by capacity and tariffs. Therefore, this is both an exciting and challenging time in the industry.” [Utilities]
The ISM Services PMI Report, published monthly by the Institute for Supply Management, measures economic activity in the U.S. services sector based on survey responses from purchasing and supply executives nationwide. The headline index, known as the Services PMI, operates on a scale where readings above 50 percent indicate expansion while readings below 50 percent signal contraction. The report tracks key subindexes including Business Activity, New Orders, Employment, and Supplier Deliveries, providing insights into demand conditions, pricing pressures, and labor trends. The services sector accounts for more than two-thirds of U.S. economic activity, making this report a critical indicator of overall economic health.
