Services PMI

The S&P Global US Services PMI, or Purchasing Managers' Index, is a monthly survey of US services conditions, compiled by S&P Global. It covers around 400 service sector companies across consumer services excluding retail, transport, information, communication, finance, insurance, real estate and business services.

The panel is stratified by sector and workforce size based on GDP contributions, and data collection began in October 2009. The headline, the Services Business Activity Index, measures direction of change from the prior month, not size of output growth, and covers services only. It is one of the PMI surveys available in over 40 countries and key regions including the eurozone.

Responses are collected in the 2nd half of the reference month and measure change from the prior month. A flash estimate from around 85% of responses appears around the 3rd week of the reference month across manufacturing, services and Composite PMI. Final manufacturing PMI is published around the 1st business day of the next month, with final services and Composite PMI near the 3rd business day. Each release appears at 09:45 Eastern Time, or 13:45 UTC in summer and 14:45 in winter.

January dates shift for holiday closures, and the underlying answers are never revised, though seasonal factors can be. The flash-to-final gap averages 0.1 since October 2009, or 0.4 in absolute terms.

The publisher assigns no weights to services components, so each sub index below simply tracks its own diffusion signal, a gauge of breadth.

• Business Activity: change in activity versus the prior month; the headline itself.
• New Business: inflows of new work and orders, the main demand driver of activity.
• New Business from Abroad: foreign demand for services, or services exports.
• Employment and Outstanding Business: staffing levels and backlogs of work; rising backlogs with weak hiring signal capacity strain.
• Input Prices and Prices Charged: operating costs and the selling prices billed to clients, the services inflation signal.
• Business Expectations: confidence in future activity.

In the October 2022 release, published 3 November 2022, the final index fell to 47.8 from 49.3. It beat the flash estimate of 46.6, so both readings signaled contraction at different depths. New business fell for the 3rd time in 5 months, and export orders fell for a 5th month, the 2nd fastest fall since May 2020.

Employment was near stagnation, ending 27 months of staffing growth, while business expectations sank to their lowest in over 2 years. Input cost inflation cooled to its slowest since January 2021, and charge inflation to its slowest since December 2020, even as activity shrank, showing divergence.

1. Diffusion index: for each question, add the share answering higher to half the share unchanged; lower answers score 0, and results run 0 to 100. For example, 30% higher, 50% unchanged and 20% lower gives 30 plus 25, or 55.0.
2. Seasonal adjustment: seasonally adjust each index; above 50 means growth from the prior month, below 50 means contraction, and 50 means no change.
3. Headline: the headline Services Business Activity Index comes straight from 1 question on business activity versus 1 month ago, with no component weights. By contrast, manufacturing blends new orders 0.3, output 0.25, employment 0.2, delivery times 0.15 and stocks 0.1, with delivery times inverted.
4. Composite: the Composite Output Index is a weighted average of manufacturing output and services activity, weighted by their shares of GDP.