by Calculated Risk on 5/05/2025 10:00:00 AM
(Posted with permission). The ISM® Services index was at 51.6%, up from 50.8% last month. The employment index increased to 49.0%, from 46.2%. Note: Above 50 indicates expansion, below 50 in contraction.
From the Institute for Supply Management: Services PMI® at 51.6% April 2025 Services ISM® Report On Business®
Economic activity in the services sector expanded for the 10th consecutive month in April, say the nation’s purchasing and supply executives in the latest Services ISM® Report On Business®. The Services PMI® registered 51.6 percent, indicating expansion for the 56th time in 59 months since recovery from the coronavirus pandemic-induced recession began in June 2020.
The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In April, the Services PMI® registered 51.6 percent, 0.8 percentage point higher than the March figure of 50.8 percent. The Business Activity Index registered 53.7 percent in April, 2.2 percentage points lower than the 55.9 percent recorded in March. This is the index’s 59th consecutive month of expansion. The New Orders Index recorded a reading of 52.3 percent in April, 1.9 percentage points higher than the March figure of 50.4 percent. The Employment Index stayed in contraction territory for the second month in a row; the reading of 49 percent is a 2.8-percentage point increase compared to the 46.2 percent recorded in March.
“The Supplier Deliveries Index registered 51.3 percent, 0.7 percentage point higher than the 50.6 percent recorded in March. This is the fifth consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)
“The Prices Index registered 65.1 percent in April, a 4.2-percentage point increase from March’s reading of 60.9 percent and a fifth consecutive reading above 60 percent. The Inventories Index registered its third consecutive month in expansion territory in April, registering 53.4 percent, an increase of 3.1 percentage points from March’s figure of 50.3 percent. The Inventory Sentiment Index expanded for the 24th consecutive month, registering 56.1 percent, down 0.5 percentage point from March’s reading of 56.6 percent. The Backlog of Orders Index registered 48 percent in April, a 0.6-percentage point increase from the March figure of 47.4 percent, indicating contraction for the eighth time in the last nine months.
“Eleven industries reported growth in April, a drop of three from the 14 industries reported in January and February. The Services PMI® has expanded in 55 of the last 58 months dating back to June 2020. The April reading of 51.6 percent is 1 percentage point below the 12-month average reading of 52.6 percent.”
Miller continues, “April’s change in indexes was a reversal of March’s direction, with increases in three (New Orders, Employment and Supplier Deliveries) of the four subindexes that directly factor into the Services PMI®. Of those four, only the Business Activity Index had a lower reading compared to March. Employment continues to be the only one of these subindexes in contraction territory, with two straight months of contraction. From December through February, all four subindexes were in expansion. Regarding tariffs, respondents cited actual pricing impacts as concerns, more so than uncertainty and future pressures. Respondents continue to mention federal agency budget cuts as a drag on business, but overall, results are improving.”
emphasis added
This was below consensus expectations.
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