US service sector index hits all-time high in May: survey
Washington (AFP) –
The massive US services sector continued to improve in May, expanding for the 12th straight month and hitting an all-time high, according to an industry survey released Thursday.
As the economic reopening from the Covid-19 pandemic picked up speed, the Institute for Supply Management (ISM) said its service sector index rose 1.3 points to 64, surpassing analyst expectations.
ISM's non-manufacturing index showed all 18 service industries reported growth, though the employment component slowed.
"The rate of expansion is very strong, as businesses have reopened and production capacity has increased," survey chair Anthony Nieves said in a statement.
"However, some capacity constraints, material shortages, weather-related delays and challenges in logistics and employment resources continue."
The survey showed prices continued to climb as well amid widespread reports of rising costs for commodities -- with none showing declines in the month, according to the report.
"Stimulus money, increased vaccinations, increased dining capacity and pent-up demand are driving a fast recovery for dine-in restaurants -- and all consumer segments, it seems -- resulting in labor shortages and supply chain gaps," said one respondent in the accommodation & food services sector.
A construction executive flagged shortages of "crucial material and equipment" as the biggest concern.
Nieves noted the 4.3 point jump in the supplier deliveries index indicating deliveries have slowed, which he said "is typical as the economy improves and customer demand increases."
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