Details:
- employment index 50.7 versus 53.1 prior
- new orders index 55.0 versus 55.5 prior
- prices paid index 56.8 versus 54.1 prior
- new export orders 61.1 versus 61.5 prior
- imports 52.3 versus 54.6 prior
- backlog of orders 52.1 versus 43.9 prior
- inventories 50.4 versus 55.9 prior
- supplier deliveries 48.1 versus 47.6 prior
- inventory sentiment 56.6 versus 54.0 prior
Three big questions around the service sector:
1) How much of spending is still pandemic ‘revenge’ spending, like travel and restaurants?
2) How much of an effect is excess savings having and when will it run out?
3) Will student loan repayments restarting be a drag?
Comments in the report:
- “Pricing in food sectors has come down incrementally, but in very small, almost minute percentages. IT labor pricing is still inflated.” [Accommodation & Food Services]
- “Sales have been steady.” [Construction]
- “Continuing to see improved case volume in 2023, although July and summer months have flattened a bit as usual. Still scratching and clawing to find savings with economic inflationary pressures.” [Health Care & Social Assistance]
- “Business remains steady.” [Information]
- “We are maintaining a cautious approach, although inflation seems to be easing. The overall business environment has stabilized, but tight labor markets are creating ongoing issues.” [Management of Companies & Support Services]
- “Hiring of employees, temporary workers and consultants continues to be slow as companies remain cautious about increasing fixed and variable expenses during uncertain economic times.” [Professional, Scientific & Technical Services]
- “Although capacity in transportation services has improved, there are still some industries with lagging lead times for their products.” [Public Administration]
- “Overall economy is good. Supply chain market is stable. Commodity prices are increasing but at a slower rate. Lead times and deliveries are ideal, and inventories are lower than last quarter. The unemployment rate is at its lowest point in 70 years. Wages continue to grow.” [Retail Trade]
- “We are still having issues with getting certain materials based on chips, though not nearly as imposing as they were a year ago. Lead times from Europe and in general seem to be improving. There are challenges with suppliers who made changes during the pandemic to spread workloads — they are not as responsive, and this affects lead times.” [Transportation & Warehousing]
- “Steady, slower growth.” [Finance & Insurance]
- “High operational expenses continue to put pressure on the business and limit hiring. Supplier costs (are) not coming down as much as expected. Service levels from suppliers continue to improve. Trucking metrics improved.” [Wholesale Trade]
There’s a strong theme in these comments around ‘steady’ and ‘stable’ business.
The bounce in prices paid is also getting some attention; that could be a reflection of gasoline and it’s worth keeping an eye on but it’s also worth noting that the component has come down a lot.