Key facts
- The ISM Services PMI decreased to 54.5 in May from 59.2 in April.
- The index has remained in expansion territory for 23 consecutive months.
- New orders and business activity saw a decline.
- Employment increased in the services sector.
- Supplier deliveries slowed, and inventories decreased.
The US services sector continued its expansion in May, though at a moderated pace, as indicated by the Institute for Supply Management (ISM) Services PMI. The headline index registered 54.5, a decrease from April's 59.2, but still above the 50.0 threshold that signifies growth. This marks the 23rd consecutive month of expansion for the sector. New orders and business activity experienced a slowdown, with the respective indices falling. However, employment within the services sector saw an increase. Supplier deliveries slowed, and inventories decreased. The business activity index declined, and the prices paid index also fell, suggesting easing inflationary pressures. Despite the overall slowdown in new orders, the business outlook for the next 12 months remained positive, with companies anticipating continued growth. The HSBC India Services PMI, compiled by S&P Global, also showed strong growth in India, reaching a six-month high of 59.8 in May, driven by domestic demand.