ISM®
A rate of 62.7% means the economy is growing.
The report cited a shortage of construction contractors as the top economic concern in the services sector in April.
Due to high demand and shortage of supply of goods and services, pricing is experiencing inflationary pressures, which should be short lived.
Construction experienced the highest price increases of all 18 services industries.
The business activity index was at its highest since 1997.
Economic growth in April was strong, down only 1% from March’s record high of 63.7%, according to a monthly economic report.
The Institute of Supply Management (ISM) issues monthly economic reports on the manufacturing and services sectors based on surveys with executives in those industries.
April 2021 ISM and Markit Services Surveys Remain Well Into Expansion
The ISM declined but remained in expansion whilst the Markit PMI improved and advanced further into expansion.
Analyst Opinion of the ISM and Markit Services Survey
With the economy reopening, it comes as no surprise that both of these indices are well into expansion.
From Econoday:
Most marked upturns in output and new orders on record
Employment growth accelerates
Cost pressures strongest on record
April PMITM data indicated a marked and unprecedented expansion in business activity across the U.S. service sector. Supporting the upturn in output was the fastest increase in new business on record. Pressure on capacity remained evident, as backlogs of work accumulated at a faster pace and employment rose at the second-sharpest rate on record. Some concerns regarding the sustainability of new order inflows weighed slightly on business confidence, although optimism remained relatively strong. Meanwhile, input
Provided by Dow Jones By Xavier Fontdegloria Service providers in the U.S. reported robust growth in business activity in April due to the easing of virus-related restrictions, reduced health risks and a wave of spending triggered by strong fiscal support to households. The ISM Services Report on Business PMI decreased to 62.7 in April from an all-time high of 63.7 in March, data from a survey compiled by the Institute for Supply Management showed Wednesday. Economists polled by The Wall Street Journal expected the PMI to come in at 64.1, well above the 50 point break-even point that separates expansion over contraction. There was slowing growth in the services sector in April; however, the rate of expansion is still strong, said Anthony Nieves, chair of the ISM Services Business Survey Committee.
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“The previous high was in October 2018, when the Services PMI registered 60.9%,” Anthony Nieves, the chair of the ISM Services Business Survey Committee, said in a press release. “The March reading indicates the 10th straight month of growth for the services sector, which has expanded for all but two of the last 134 months.
IMF upgrades economic outlook for 2021
The International Monetary Fund upgraded its outlook for global economic growth on Tuesday, forecasting worldwide output will rise 6% this year, according to Reuters.
The IMF had previously expected growth of 5.5% less than three months ago. The upgrade largely reflects a better outlook for the US economy, which the IMF sees growing by 6.4%, the article said.