The US services sector saw economic activity increase in November, with the rate of expansion setting a record for the fifth time in 2021, the Institute for Supply Management reported today. Employment activity also increased at a faster rate than the prior month.
The report’s “Services PMI” rose to an all-time high reading of 69.1% in November from October’s reading of 66.7%. Readings above 50% indicate growth, with higher numbers indicating quicker growth; November’s reading indicates the 18th straight month of growth for the services sector and exceeds the former all-time high set in October; previous records were set in March (63.7%), May (64%) and July (64.1%).
All 18 services industries that comprise the Services PMI reported growth.
“The composite index indicated growth for the 18th consecutive month after a two-month contraction in April and May 2020,” said Anthony Nieves, chair of the Institute for Supply Management Services Business Survey Committee. “In November, record growth continued for the services sector, which has expanded for all but two of the last 142 months. Demand continues to outpace supply that has been impacted by capacity constraints, shortages of labor and materials, and logistical challenges. This has also caused demand-pull inflation that is affecting overall business conditions.”
The ISM’s report also found that employment activity in the services sector grew in November for the fifth consecutive month after contracting in June. The growth pace also increased.
The services employment index rose to a reading of 56.5% in November from 51.6% in October. The employment index is one of four diffusion indexes that comprise the composite Services PMI. The other diffusion indexes are new orders, production and inventories.
The report is based on a survey of purchasing and supply executives nationwide. Comments from respondents include: “People are quitting to get paid more at different occupations” and “Increased business activity and customer demand requires more human resources.”