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Economy in Brief

U.S. ISM Services PMI Rebounds in March
by Winnie Tapasanun  April 5, 2022

• Economic activity in the services sector expands in March for the 22nd straight month.

• Rebounds in business activity, new orders and employment.

• Prices index rises to a near record high.

The U.S. ISM Services PMI was at 58.3 in March, up from 56.5 in February but down from 59.9 in January, according to the Institute for Supply Management. The March reading was down from a peak of 68.4 in November and 62.2 in March 2021. However, the 12-month average was 62.3, reflecting consistently strong growth in the U.S. services sector. The Action Economics Forecast Survey had expected 58.1 for March. Haver Analytics constructs a composite index combining the services index and manufacturing reading. This index was at 58.2 in March, up from 56.7 in February but down from 62.4 in March 2021. These series date back to July 1997.

In the latest services survey, the business activity index rebounded to 55.5 in March from 55.1 in February. An improved 30.7% (NSA) of respondents reported higher activity, up from 24.4% in February. A lessened 14.7% reported an activity decline, slightly down from February's 16.3%. The new orders index recovered to 60.1 from 56.1. A higher 31.0% (NSA) of respondents reported more orders while a lessened 11.0% reported a decline. The employment index rebounded to 54.0, a three-month high, from a 48.5 contraction-level. An improved 24.9% of respondents indicated higher employment but a lessened 15.7% reported it lower. The percentage indicating that employment held steady rose to 59.4% of respondents. The supplier deliveries index (NSA) fell to 63.4 in March from 66.2 in February. An improved 5.9% of respondents reported faster delivery speeds while 32.7% reported slower speeds.

The prices index rose to a near record 83.8 in March from 83.1 in February, registering the highest level since December's record-high 83.9. A higher 72.9% (NSA) of respondents reported price increases while 0.6% reported price decreases. A lessened 26.5% reported stable prices.

The new export orders index advanced to 61.0 in March, the highest level since December, from 53.0 in February. The backlog of orders index improved to 64.5, the highest level since November, from 64.2. The inventories index rose to 51.7, the highest level since March 2021, from 50.8. This also indicated that inventories grew in March for the second straight month after eight consecutive months of contraction. The imports index, however, fell to 45.0 in March, the lowest level since May 2020, from 51.7 in February, showing the first contraction since September. These series are not seasonally adjusted and not included in the ISM Services PMI total.

The ISM figures are available in Haver's USECON database, with additional detail in the SURVEYS database. The expectations figure from Action Economics is in the AS1REPNA database.

ISM Services Survey (SA) Mar Feb Jan Mar '21 2021 2020 2019
Services PMI 58.3 56.5 59.9 62.2 62.5 54.3 55.5
   Business Activity 55.5 55.1 59.9 66.7 64.6 55.9 58.0
   New Orders 60.1 56.1 61.7 65.8 63.4 55.6 57.6
   Employment 54.0 48.5 52.3 55.2 54.4 46.1 55.0
   Supplier Deliveries (NSA) 63.4 66.2 65.7 61.0 67.5 59.7 51.5
Prices Index 83.8 83.1 82.3 73.5 77.5 58.7 57.5
ISM Mfg. & Services (Haver Composite) 58.2 56.7 59.6 62.4 62.3 54.1 55.1
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