The expansion pace for the US services firms has dropped to its slowest speed in almost 3 years, as the level of new orders and business activity weakened.
The Institute for Supply Management (ISM), the largest and oldest supply management organization across the globe, said that it experienced a drop from 55.1 to 53.7 in its non-manufacturing PMI (Purchasing Managers’ Index) for the US last month. The index measure for the month of July was weakest recorded since the month of August 2016. The readings above 50 indicate growth, as such the index denotes that the total growth would continue but will have a downshift as well. The services division offers most US jobs as well as economic activity.
The index measures of new orders and business activity lowered, although the two still indicated growth. On the other hand, the hiring measure has improved.
According to Anthony Nieves, ISM’s non-manufacturing business committee chair person, a slowdown may take place during summer months; however, the survey signals that decade-plus growth would continue.
The index is derived from a survey conducted on businesses. A few respondents said tariffs launched against China by President of US, Donald Trump have affected their businesses, an issue which may increase if the Trump admin continues to expand such import tariffs as scheduled for September.