Services Indexes Mixed

Economic activity in the non-manufacturing sector grew in March for the 122nd consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM^® Report On Business.^®
 

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management^® (ISM^®) Non-Manufacturing Business Survey Committee: “The NMI^® registered 52.5 percent, 4.8 percentage points lower than the February reading of 57.3 percent. This represents continued growth in the non-manufacturing sector, at a slower rate. The Non-Manufacturing Business Activity Index decreased to 48 percent, 9.8 percentage points lower than the February reading of 57.8 percent, reflecting contraction for the first time since July 2009, when the index registered 47.2 percent. The New Orders Index registered 52.9 percent, 10.2 percentage points below the reading of 63.1 percent in February. The Employment Index decreased 8.6 percentage points to 47 percent from the February reading of 55.6 percent.

 ...meanwhile...

U.S. service providers registered the steepest decline in business activity since data collection began ten-and-a-half years ago in March as the coronavirus disease 2019 (COVID-19) pandemic led to business closures and sharply reduced client demand for services from both businesses and households. Similarly, public health measures to tackle the spread of the virus across key export destinations caused a marked fall in new export orders. Consequently, firms were reportedly forced to implement hiring freezes and make redundancies, with business expectations over the coming 12 months slumping to a record low due to uncertainty surrounding the longevity of the COVID-19 outbreak. 

Meanwhile, lower demand for inputs and efforts to retain clients led to decreases in input costs and selling prices, respectively.  

The seasonally adjusted final IHS Markit US Services Business Activity Index registered 39.8 at the end of the first quarter, which, although revised up from the 'flash' figure of 39.1, was down sharply from 49.4 in February. The latest data, collected between 12th and 27th March, indicated the quickest decline in output since data collection began in October 2009. Business activity fell markedly following a sharp reduction in new orders, largely stemming from the outbreak of COVID-19.  

Concurrently, new orders received by service providers contracted at the sharpest rate since the survey began, as customer and business closures led to client cancellations. The marked downturn in total sales was mirrored in the trend for new export orders, which fell at a substantial pace as foreign client demand faded amid emergency lockdowns