U.S. Service Sector Growth Accelerates Much More Than Expected In March
Growth in U.S. service sector activity saw a substantial
acceleration in the month of March, according to a report released
by the Institute for Supply Management on Monday.
The ISM said its Services PMI surged up to 63.7 in March from
55.3 in February, with a reading above 50 indicating growth.
Economists had expected the index to rise to 58.5.
The jump lifted the Services PMI to an all-time high, surpassing
the previous record high of 60.9 set in October of 2018.
"Respondents' comments indicate that the lifting of coronavirus
(COVID-19) pandemic-related restrictions has released pent-up
demand for many of their respective companies' services," said
Anthony Nieves, Chair of the ISM Services Business Survey
The sharp increase by the headline index came as the business
activity index soared to 69.4 in March from 55.5 in February and
the new orders index skyrocketed to 67.2 from 51.9. Both indexes
reached record highs.
The employment index also climbed to 57.2 in March from 52.7 in
February, indicating an acceleration in the pace of job growth in
the service sector.
Meanwhile, the ISM said the supplier deliveries index inched up
to 61.0 in March from 60.8 in February, with a reading above 50
indicating slower deliveries.
"Production-capacity constraints, material shortages, weather
and challenges in logistics and human resources continue to cause
supply chain disruption," said Nieves.
The report also showed the prices index rose to 74.0 in March
from 71.8 in February, pointing to a continued acceleration in the
rate of price growth.
Last Thursday, the ISM released a separate report showing the
pace of growth in U.S. manufacturing activity also accelerated by
much more than anticipated in the month of March.
The ISM said its Manufacturing PMI jumped to 64.7 in March from
60.8 in February, with a reading above 50 indicating growth in
manufacturing activity. Economists had expected the index to inch
up to 61.3.
With the much bigger than expected increase, the Manufacturing
PMI reached its highest level since hitting 69.9 in December of