#United States #Economic Growth #Tempe #ISM Report #Services PMI

November 2025 ISM Services PMI Report

The latest ISM® Services PMI® report indicates that the services sector's economic activity expanded in November 2025, maintaining an upward trend for the ninth consecutive month. The recorded Services PMI® of 52.6% reflects a 0.2 percentage point increase from October's 52.4% figure, which is a sign of growth in the sector.

Key Indicators

The report, released by Steve Miller, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee, reveals several key indexes that showcase the state of the sector:

• - Business Activity Index: Increased to 54.5%, a slight improvement over October's 54.3%, continuing to signal a steady growth environment.
• - New Orders Index: Registered at 52.9%, down from 56.2% in October but still above the 12-month average of 51.7%. This indicates that new orders are continuing to flow, albeit at a slower rate.
• - Employment Index: While still in contraction territory at 48.9%, this reflects the highest level since 50.7% in May, marking a steady improvement over the past few months.
• - Supplier Deliveries Index: This index showed a slowdown in delivery performance, registering at 54.1%, which indicates suppliers are struggling to keep up with demand, a trend that has persisted for over a year.

Price Increases and Inventory Trends

The Prices Index is notable for staying elevated at 65.4% despite a drop from October's 70%, signifying that while prices continue to rise, they are doing so at a slower pace. This index has remained above 60% for the past year, pointing towards persistent inflationary pressures in the services sector.

On the flip side, the Inventories Index has returned to expansion territory at 53.4%, up from 49.5% in October. This signals an increase in stock levels after a period of contraction, suggesting that companies are preparing for potential increases in demand.

Industry Growth Highlights

The report indicates that twelve industries reported growth in November, with Retail Trade; Arts, Entertainment and Recreation; and Health Care leading the charge. Contrarily, five sectors faced contraction, including Construction and Transportation/Warehousing. This mixed performance underscores the uneven recovery within sectors amid ongoing economic uncertainties.

Challenges Ahead

Despite positive signs, there remains a cautionary tale within the details of the survey. Tariffs and the recent government shutdown are highlighted as present challenges, impacting both demand and operational costs for businesses across various sectors. Many respondents echoed sentiments reflecting these uncertainties, particularly regarding pricing strategies affected by tariff fluctuations.

Conclusion

The November 2025 ISM Services PMI report paints a complex picture of growth in the services sector, characterized by expansion in business activity and order volumes, constrained by labor shortages and ongoing economic uncertainties. As we advance, the continuous fluctuations across different indexes will be crucial in determining how businesses navigate the upcoming months and potential challenges in the market landscape. The overall trend remains positive with signs of recovery, but vigilance and adaptability will be key for stakeholders across the services industry moving forward.