U.S. service providers expanded at the fastest pace in May, highlighting the rapid improvement in business activity across the economy.
The services index of the Institute for Supply Management rose to 64 last month (the highest in 1997 data), from 62.7 in April, according to data shown on Thursday, June 3. . of economists.
The figures highlight the increase in demand for services such as air travel, hotel stays and meals as social activity increases and pandemic restrictions are reduced. Accumulated consumer demand and steady business investment are expected to provide a lot of juice for recovery in the coming months, but challenges remain.
Similar to the group’s manufacturing survey, the report showed high price pressures, growing order delays and softening the pace of hiring. The limited availability of both materials and skilled workers runs the risk of slowing the pace of economic growth.
“The pace of expansion is very strong as companies have reopened and production capacity has increased,” Anthony Nieves, chairman of the ISM Services Business Survey Committee, said in a statement. “However, some capacity constraints, material shortages, weather-related delays and challenges in logistics and labor resources continue.”
The 18 service industries recorded growth in May, led by retailers, wholesalers, construction companies and entertainment and recreation providers.
The price index paid for materials advanced to the second highest level on record as the level of order arrears from service providers reached a record high. Delivery times for suppliers have been extended.