ISM Service Industry Responses Offer A Less Rosy Take

Whilst only anecdotal, more of the selected industry responses paint a softer picture than not compared to the relative strength in ISM Services and its components. Following comments from the press release:

• Accommodation & food services: Restaurant sales have softened the past few weeks (due to) post-holiday and seasonality factors, but we’re also hearing because of consumer pressures, particularly fuel and food prices
• Construction: Interest rates have significantly impacted the homebuilding market. Cancellation rates have increased, as homebuyers can no longer afford the monthly payment.
• Support services: Can feel the economy weakening. Clients are making appropriate moves in anticipation of a recession.
• Retail: (We are) in inventory reduction mode, attempting to match inventory levels to current lower sales trends.
• Healthcare: Business continues to remain below pre-pandemic levels.
• Utilities: Holding steady, but some headwinds are definitely ahead on the economic front. However, supply chain issues appear to be easing, though still not great.