for Supply Management (ISM) reported on Wednesday that its non-manufacturing
index (NMI) came in at 55.3 in February, which was 3.4 percentage points lower
than unrevised January reading of 58.7 percent. The reading pointed to the growth in the services sector for the ninth
straight month but at the slowest pace since a contraction in May 2020.
Economists forecast the index to remain at 58.7 last month. A reading above 50 signals expansion, while a reading below 50 indicates contraction.
Of the 18 manufacturing industries, 17 reported gains last month, the ISM said, adding that respondents were mostly optimistic about business recovery and the economy even though production-capacity constraints, material shortages and challenges in logistics and human resources were impacting the supply chain.
According to the report, the ISM’s New Orders gauge declined 9.9 percentage points to 51.9 percent from the January reading, while its non-manufacturing Business Activity measure fell 4.4 percentage points to 55.5 percent and the Employment indicator went down 2.5 percentage points to 52.7 percent. Meanwhile, its Supplier Deliveries index rose 3.0 percentage points to 60.8 percent and the Inventories indicator surged 9.7 percentage points to 58.9 percent. Elsewhere, the Prices index climbed 7.6 percentage points to 71.8 percent, indicating that prices increased in February, and at a faster rate.
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