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Purchasing Managers’ Index – Services

03-09-2014 08:30

Services PMI drops to 54.2 in August: stable growth despite flagging orders

  • The purchasing managers’ index for the service sector (Services PMI) dropped from 60.1 in July to 54.2 in August. The PMI has remained in the growth zone for over a year, indicating stable growth in the service sector. Planned business activity remains high, which suggests that companies have a positive outlook for the next six months.

  • The sub-index for new orders dropped significantly, falling from 65.5 for July to 56.1 for August. New orders made the largest negative contribution to the total index, pulling it down by 3.3 points. Furthermore, the index for order backlogs fell to 52.9. The current order scenario coincides with weaker business activity. The sub-index for business activity reached its lowest level this year, although it remains in the growth zone.

  • The employment index dropped by 5.5 points to 51.0. Nevertheless, the sub-index’ levels for the past few months indicate that employment has stabilized since the beginning of the year.

  • The index for prices of suppliers’ intermediate goods rose back above the 50 mark, landing at 53.3. However, this index will need to rise further to change the current scenario of restrained price pressure for service companies.

PMI - Services, August 2014

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