ISM non-manufacturing PMI dips below forecast, signaling slower growth

Published 05/02/2025, 16:02
ISM non-manufacturing PMI dips below forecast, signaling slower growth

The Institute of Supply Management (ISM) released its Non-Manufacturing Purchasing Managers’ Index (PMI) report, indicating a slower growth rate in the non-manufacturing sector. The actual figure came in at 52.8, falling short of the forecasted number of 54.2.

The ISM Non-Manufacturing PMI, also known as the ISM Services PMI, is a composite index used as an indicator of the overall economic condition for the non-manufacturing sector. It takes into account several factors, including business activity, new orders, employment, and supplier deliveries. A reading above 50 percent typically indicates expansion in the non-manufacturing sector, while a reading below 50 signifies contraction.

The actual figure of 52.8, though still indicative of expansion, is lower than the forecasted 54.2, suggesting a slower pace of growth than anticipated. This could be seen as a negative or bearish sign for the USD, as higher readings are generally considered positive or bullish.

Comparing the actual figure to the previous month’s reading of 54.0, the ISM Non-Manufacturing PMI has declined. This decrease suggests a slowdown in the growth rate of the non-manufacturing sector.

The ISM Non-Manufacturing PMI is based on data compiled from monthly replies to questions asked of more than 370 purchasing and supply executives in over 62 different industries. These industries represent nine divisions from the Standard Industrial Classification (SIC) categories and are diversified by SIC category based on each industry’s contribution to Gross Domestic Product (GDP).

In light of the lower than expected reading, investors and economists will be keeping a close eye on future reports to gauge whether this slowdown is a temporary blip or indicative of a more prolonged trend in the non-manufacturing sector.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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