MNI INTERVIEW: US Services Growth Gaining Momentum- ISM Chief
MNI (WASHINGTON) - U.S. services growth broadened in September to a 17-month high and looks likely to strengthen further in 2025 as investment increases, Institute for Supply Management chair Steve Miller told MNI Thursday.
"The top line would be the broadening of the expansion within additional industries is driving the overall PMI," he said in an interview.
ISM survey respondents expect slow growth in the fourth quarter with some reluctant to pull the trigger on new projects due to uncertainty around the election. But in early 2025, Miller is expecting a "pop" in investment from fiscal spending and lower interest rates that will continue to buoy growth.
"Those that were doing well are continuing to do okay and then others that were not doing so well last month and even two months ago are doing significantly better," Miller said.
The ISM composite jumped to 54.9 last month, from 51.5, well above market expectations of 51.7, and the highest since February 2023. The surge was driven by the new orders index jumping 6.4ppts to 59.4 and the business activity index climbing 6.6ppts to 59.9. Twelve industries reported growth in September, up two from the 10 industries reporting growth in August.
DEMAND IMPROVING
ISM's employment index softened to 48.1 from 50.2 in August. Miller downplayed downside concerns, noting survey respondents saw marginal changes in the month. "It is generally a low-hiring, low-firing environment."