By Xavier Fontdegloria


Activity in the U.S. services sector accelerated in July from the previous month, hitting a new record high, amid an increase in demand and widespread supply-related problems.

The ISM Services Report on Business PMI increased to 64.1 in July from 60.1 in June, data from a survey compiled by the Institute for Supply Management showed Wednesday.

Economists polled by The Wall Street Journal forecast the PMI to come in at 60.5.

"The rate of expansion in the services sector recorded another all-time high," said Anthony Nieves, chair of the ISM Services Business Survey Committee. The previous record was reached in May, when the PMI came in at 64.0.

The reopening of previously limited activity in hospitality, leisure and traveling is fueling a boom in the services sector this summer. However, many firms struggle with both input and labor shortages that constrain potential growth that showed no signs of abating in July.

The ISM services business activity index climbed to 67.0 in July from 60.4 in June, while the new orders index rose to 63.7 from 62.1, signaling strong demand.

The employment index swung to expansion territory, reaching 53.8 from 49.3 the previous month. Despite the improvement of the indicator, the constrained labor pool continues to be an issue for companies, Mr. Nieves said.

Supply-chain disruption continued to be widespread. The supplier deliveries index edged up to 72.0 in July from 68.5 the previous month. The prices index climbed to 82.3 from 79.5, the data showed.

"Materials shortages, inflation and logistics continue to negatively impact the continuity of supply," Mr. Nieves said.


Write to Xavier Fontdegloria at


(END) Dow Jones Newswires

August 04, 2021 10:33 ET (14:33 GMT)

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