The Services PMI® fell to 48.8% in June 2024 compared to May’s reading, contracting at the fastest pace in four years. This drop reflects declines in business activity, new orders, and employment, alongside challenges in supplier deliveries and inventory management.

Key Points

1. Overall Services PMI®: The index fell to 48.8% from 53.8% in May, marking a contraction in the services sector.
2. Business Activity Index: came in at 49.6%, down from 61.2% in May, the first contraction since May 2020.
3. New Orders Index: Dropped to 47.3% from 54.1% in May, indicating contraction for the first time since December 2022.
4. Employment Index: Fell to 46.1%, a 1 percentage point decrease from May, marking the sixth contraction in seven months.
5. Supplier Deliveries Index: Registered 52.2%, slightly down from 52.7% in May, indicating slower delivery times.
6. Prices Index: Decreased to 56.3% from 58.1% in May, though prices continued to rise.
7. Inventories Index: Contracted to 42.9%, a significant decrease from 52.1% in May, showing reduced inventory levels.
8. Backlog of Orders Index: Fell to 44.0% from 50.8% in May, indicating a reduction in order backlogs.
9. Industry Performance: Growth was reported in eight industries, including Health Care & Social Assistance, while declines were seen in Real Estate, Rental & Leasing, and Retail Trade.
10. Respondent Comments: Indicated flat or lower business activity, stabilized but high costs, and ongoing supply chain challenges impacting various sectors.

These findings illustrate the increased volatility in the services sector, influenced by demand and supply-side issues.