The ISM non-manufacturing purchasing managers’ index (PMI) for February released by the United States on Thursday (3rd) fell to 56.5, far below the expected 61.1, and also from 59.9 in January, a one-year low. Despite a sharp drop in cases of the new coronavirus strain Omicron from mid-January, the index fell for three consecutive months, meaning the slowdown in economic growth at the end of last year continued.
February US ISM non-manufacturing PMI sub-index:
- The production index of business activities was reported at 55.1, the previous value was 59.9
- The new orders index was at 56.1, the previous value was 61.7
- The employment index was reported at 48.5, the previous value was 52.3
- The supplier delivery index was reported at 66.2, the previous value was 65.7
- The inventory index was at 50.8, the previous value was 49.4
- The price index of raw materials was reported at 83.1, the previous value was 82.3
- The index of outstanding orders was reported at 64.2, the previous value was 57.4
- The new export orders index was reported at 53.0, the previous value was 45.9
- The import index of raw materials was reported at 51.7, the previous value was 51.1
- Inventory prosperity index was reported at 55.3, the previous value was 47.5
Looking at the report data, the new orders index fell to 56.1 from 61.7 in the previous month, hitting a one-year low. In addition, the employment index also fell to 48.5 from 52.3 in January, hitting a one-and-a-half-year low. It shrank for the first time in a month.
The declines in both figures might be the result of labor shortages and evidence that Omicron’s impact on the economy is lingering. The small non-agricultural ADP employment report released by the United States a few days ago showed that the number of small business employment fell in February, and the number of employees with fewer than 50 employees decreased by 96,000 in the month. risk.
The supplier deliveries and outstanding orders index rose to a 3-month high of 66.2 from 65.7 in January, and the latter rose to 64.2 from 57.4 in January, the largest order in two years. monthly increase.
At the same time, this imbalance between supply and demand is also driving inflation, with the raw materials price index further rising to 83.1 from 82.3 in January, a near-record high. In addition, with the continuation of the war between Russia and Ukraine, commodity prices will continue to rise, and I am afraid that inflation will be pushed up once more.
Anthony Nieves, chairman of the ISM Services Sector Survey Committee, said the services sector continued to be affected by supply chain disruptions, capacity constraints, inflation, logistical challenges and labor shortages, which affected the ability of companies to meet consumer demand, leading to business activity and economic growth. Cool down.
Andrew Hunter, senior U.S. analyst at Capital Economics, wrote in a report that despite a sharp drop in Omicron cases last month, the overall PMI still declined, further indicating that economic fluctuations have had little apparent impact on the economy; both business activity and new orders declined. , facing a belated correction following previous beats.
The final value of the services PMI released by IHS Markit on the same day was 56.5, although slightly lower than the expected 56.7, but a sharp rebound from the final value of 51.2 in January, indicating strong growth in orders and employment.
Another IHS Markit composite index has fallen for three straight months, down nearly 12 percentage points from its November high, as the coronavirus dampened business activity.
