Retail strength helped keep the service Purchasing Managers Index in growth territory for November even as manufacturing slipped.
Economic activity in the services sector continued expanding in November, according to the Institute for Supply Management Services PMI Report, which registered 52.6% and grew for the ninth month in 2025. Purchasing and supply executives polled for the ISM report held the PMI figure above the 50% line that separates expansion from contraction.
In issuing the report, ISM Chair Steve Miller noted the November PMI reading was 0.2 of a percentage point higher than the October figure of 52.4%. As he reviewed the components of the ISM report, Miller pointed out the Business Activity Index continued in expansion territory at 54.5% for November, 0.2 percentage point higher than the 54.3% registered in October.
“The New Orders Index also remained in expansion in November, with a reading of 52.9%, 3.3 percentage points below October’s figure of 56.2% but 0.9 percentage point above its 12-month average of 51.7%,” Miller said. “The Employment Index contracted for the sixth month in a row, with a reading of 48.9%, a 0.7-percentage point improvement from the 48.2% recorded in October, the fourth consecutive monthly increase since a reading of 46.4%in July. The Supplier Deliveries Index registered 54.1%, 3.3 percentage points higher than the 50.8% recorded in October and 2.2 percentage points above its 12-month average of 51.9%. This is the 12th consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance.”
The Supplier Deliveries Index is the only PMI component that is inversed, with a reading of above 50% signalling slower deliveries, which typically occurs as the economy improves and demand increases.
“The Prices Index registered 65.4% in November, its lowest reading since hitting 65.1% in April 2025,” Miller said. “The November figure was a 4.6-percentage point drop from October’s reading of 70%. The index has exceeded 60% for 12 straight months. The Inventories Index registered 53.4%in November, an increase of 3.9 percentage points from October’s figure of 49.5%, a return to expansion after two months in contraction territory. The Inventory Sentiment Index expanded for the 31st consecutive month, registering 54.8 %, down 0.7 percentage point from October’s figure of 55.5%. The Backlog of Orders Index was in contraction territory for the ninth month in a row, registering 49.1% in November, an 8.3-percentage point increase from the October figure of 40.8%, and 3.8 percentage points above its 12-month average of 45.3%.”
Miller characterized November’s Services PMI as “a continuation of a downward trend of more than 10 percentage points in the 12-month average since February 2022, when it was 62.6%. The continued expansion in the Business Activity and New Orders indexes in November and the highest Backlog of Orders index reading since February 2025 are positive signs of an emerging recovery for the services sector. On the downside, tariffs and the government shutdown continue to be noted by survey respondents as impacting demand and costs.
The Employment Index reading of 48.9 %, while still in contraction, is its highest reading since it registered 50.7% in May 2025. The highest Supplier Deliveries Index figure, 54.1%, since October 2024 was likely due to air traffic disruptions from the government shutdown and customs impacts related to changing tariffs. The tragic UPS plane crash on November 4 is also a sobering reminder, especially with the coming holidays that rely on timely deliveries, of the risks that logistics providers take every day on our roads, waterways and skies to ensure that supply chains operate smoothly.”
The services industries reporting growth in November were led by Retail Trade and include Arts, Entertainment and Recreation; Accommodation and Food Services; Wholesale Trade; Health Care and Social Assistance; Educational Services; Public Administration; Agriculture, Forestry, Fishing and Hunting; Finance and Insurance; Information; Professional, Scientific and Technical Services, and Utilities. The services industries reporting a contraction in November were Construction; Real Estate, Rental and Leasing; Mining; Management of Companies and Support Services, and Transportation and Warehousing.
“Twelve industries reported growth in November, one more than in October, while the number reporting contraction decreased from six to five,” Miller said. “The November Services PMI reading of 52.6% is 0.9 percentage point above the 12-month average of 51.7%. However, the 12-month average continues at its lowest level since August 2024, 51.7, for the second month in a row, and the second lowest since June 2010, 51.4 %.”
The Manufacturing PMI registered 48.2% in November, a 0.5-percentage point decrease compared to 48.7% in October. Economic activity in the manufacturing sector contracted in November for the ninth consecutive month, following a two-month expansion preceded by 26 straight months of contraction. The manufacturing industries reporting November growth were Computer and Electronic Products; Food, Beverage and Tobacco Products; Miscellaneous Manufacturing, and Machinery. The industries reporting contraction in November were Apparel, Leather and Allied Products; Wood Products; Paper Products; Textile Mills; Fabricated Metal Products; Petroleum and Coal Products; Chemical Products; Nonmetallic Mineral Products; Furniture and Related Products; Transportation Equipment, and Plastics and Rubber Products.
