Services PMI® at 52.4%; October 2025 ISM® Services PMI® Report

Business Activity Index at 54.3%; New Orders Index at 56.2%; Employment Index at 48.2%; Supplier Deliveries Index at 50.8%

TEMPE, Ariz., Nov. 5, 2025 /PRNewswire/ -- Economic activity in the services sector returned to expansion in October, say the nation's purchasing and supply executives in the latest ISM^® Services PMI^® Report. The Services PMI^® registered at 52.4 percent and is in expansion territory for the eighth time in 2025.

The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management^® (ISM^®) Services Business Survey Committee: "In October, the Services PMI^® registered a reading of 52.4 percent, 2.4 percentage points higher than the September figure of 50 percent. The Business Activity Index also returned to expansion territory in October, registering 54.3 percent, 4.4 percentage points higher than the reading of 49.9 percent recorded in September. The New Orders Index remained in expansion in October, with a reading of 56.2 percent, up 5.8 percent from September's figure of 50.4 percent and its highest reading since October 2024 (56.7 percent). The Employment Index contracted for the fifth month in a row with a reading of 48.2 percent, a 1-percentage point improvement from the 47.2 percent recorded in September.

"The Supplier Deliveries Index registered 50.8 percent, 1.8 percentage points lower than the 52.6 percent recorded in September and 0.7 percentage point below its 12-month average of 51.5 percent. This is the 11th consecutive month that the index has been in expansion territory, indicating slower supplier delivery performance. (Supplier Deliveries is the only ISM^® PMI^® Reports index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)

"The Prices Index registered 70 percent in October, its first time at or above that threshold since a reading of 70.7 percent in October 2022. The October figure was a 0.6-percentage point increase from September's reading of 69.4 percent. The index has exceeded 60 percent for 11 straight months.

"The Inventories Index registered 49.5 percent in October, an increase of 1.7 percentage points from September's figure of 47.8 percent but in contraction for the second straight month after three months in expansion territory. The Inventory Sentiment Index expanded for the 30th consecutive month, registering 55.5 percent, down 0.2 percentage point from September's figure of 55.7 percent. The Backlog of Orders Index was in contraction territory for the eighth month in a row, registering 40.8 percent in October, a 6.5-percentage point drop from the September figure of 47.3 percent; this is the index's second-lowest reading since May 2009 (40 percent).

"Eleven industries reported growth in October, one more than in September, while the number reporting contraction decreased from seven to six. The October reading of 52.4 percent is 0.7 percentage point above the 12-month average of 51.7 percent. However, the 12-month average is at its lowest level since August 2024 (51.7 percent) and the second lowest since June 2010 (51.4 percent)."

Miller continues, "October's Services PMI^® is 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 percent. The rebounds in both the Business Activity and New Orders indexes in October are positive signs, while the continued contraction in the Employment index shows a lack of confidence in the continued strength of the economy. The Backlog of Orders Index continued its 3½ year declining trend; even with a contracting Employment Index, companies can more than keep up with new orders to reduce backlogs. Respondents continued to mention the impact of tariffs on prices paid. There was no indication of widespread layoffs or reductions in force, but the federal government shutdown was mentioned several times as impacting business activity and generating concerns for future layoffs. In the Health Care & Social Assistance and Retail Trade industries, panelists noted seasonal strength in activity, and comments from many industries mentioned continuing demand stability."

INDUSTRY PERFORMANCE
The 11 services industries reporting growth in October — listed in order — are: Accommodation & Food Services; Retail Trade; Wholesale Trade; Real Estate, Rental & Leasing; Health Care & Social Assistance; Utilities; Transportation & Warehousing; Agriculture, Forestry, Fishing & Hunting; Information; Professional, Scientific & Technical Services; and Educational Services. The six industries reporting a contraction in the month of October — listed in order — are: Arts, Entertainment & Recreation; Management of Companies & Support Services; Finance & Insurance; Public Administration; Construction; and Other Services.

WHAT RESPONDENTS ARE SAYING

• "Activity is generally flat month-over-month; we are closely monitoring effects of the new tariff announcement." [Finance & Insurance]
• "Uncertainty due to the federal government shutdown has shuttered many non-essential functions. This will lead to project delays and likely hurt our overall fiscal year 2026 expectations. Our sites are funded through the next couple of months, but if the shutdown continues beyond that time, we will expect mass furloughs of our employees." [Management of Companies & Support Services]
• "Relatively flat activity levels for oil and gas." [Mining]
• "Client demand for advisory and compliance services remains solid, particularly as businesses navigate evolving tax legislation and increased regulatory scrutiny. However, we are seeing extended approval cycles on discretionary projects and tighter controls on consulting spend, which is putting pressure on procurement to be more agile and cost-efficient." [Professional, Scientific & Technical Services]
• "Heightened business activity due to new fiscal year budget. Items made with or utilizing precious metals are up, basic labor is down — though maintaining employees has been more difficult since a return-to-office order was implemented." [Public Administration]
• "The overall economy continues to provide mixed signals, which makes it difficult to determine how to move forward as a business given the uncertainty." [Real Estate, Rental & Leasing]
• "Business very strong, no supply chain or logistical issues." [Retail Trade]
• "General business has been steady, with minimum fluctuation." [Transportation & Warehousing]
• "Tariffs continue to cause disruption in contracts and contracting, driving up pricing on goods, particularly engineered and manufactured equipment. The backlog of existing orders with delays continues to persist for equipment and manufactured equipment." [Utilities]
• "Business seems to be picking up. Multifamily is a big driver. I think most projects that have been postponed are finally coming to fruition as lumber prices have found a bottom. The outlook is better with the Fed's plan to continue with rate cuts. Home prices coupled with elevated interest rates continue to keep a lid on sales. Home affordability is still a bit out of reach for a large portion of potential buyers. [Wholesale Trade]

ISM^® Services PMI^® Report data is seasonally adjusted for the Business Activity, New Orders, Employment and Prices indexes. ISM^® Manufacturing PMI^® Report data is seasonally adjusted for New Orders, Production, Employment and Inventories indexes.
*Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE, AND IN SHORT SUPPLY

Commodities Up in Price
Copper Products (3); Electrical Components (3); Labor* (3); Labor — Technical; Maintenance, Repair and Operating (MRO) Services; Office Supplies; Service Contracts; Software Licensing; and Valves (2).

Commodities Down in Price
Diesel Fuel (8); Gasoline (8); and Labor*.

Commodities in Short Supply
Labor — Construction (3); and Transformers.

Note: The number of consecutive months the commodity is listed is indicated after each item.
*Indicates both up and down in price.

OCTOBER  2025 SERVICES INDEX SUMMARIES

Services PMI ^®
In October, the Services PMI^® registered 52.4 percent, a 2.4-percentage point increase compared to the September reading of 50 percent. A reading above 50 percent indicates the services sector economy is generally expanding; below 50 percent indicates it is generally contracting.

A Services PMI^® above 48.6 percent, over time, generally indicates an expansion of the overall economy. Therefore, the October Services PMI^® indicates the overall economy is expanding for the 65th straight month. Miller says, "The past relationship between the Services PMI^® and the overall economy indicates that the Services PMI^® for October (52.4 percent) corresponds to a 1.2-percentage point increase in real gross domestic product (GDP) on an annualized basis."

SERVICES PMI ^®  HISTORY

Business Activity
ISM^®'s Business Activity Index returned to expansion in October; the reading of 54.3 percent is 4.4 percentage points higher than the 49.9 percent recorded in September. The index read above 54 percent for the sixth time in 2025. Comments from respondents include: "(Our patients) have some nasty viruses and flu" and "The federal government shutdown has slowed many non-essential projects."

The 10 industries reporting an increase in business activity for the month of October — listed in order — are: Accommodation & Food Services; Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; Transportation & Warehousing; Information; Health Care & Social Assistance; Retail Trade; Utilities; Educational Services; and Professional, Scientific & Technical Services. The three industries reporting a decrease in business activity for the month of October are: Arts, Entertainment & Recreation; Management of Companies & Support Services; and Public Administration.

New Orders
ISM^®'s New Orders Index registered 56.2 percent in October, 5.8 percentage points higher than the reading of 50.4 percent reported in September. The index has been in expansion territory in 32 of the last 34 months. Comments from respondents include: "New sales orders have come in across a specific vertical market (data centers)" and "Increase in M&A activity within technology, media and telecom sector."

The 12 industries reporting an increase in new orders for the month of October — listed in order — are: Accommodation & Food Services; Retail Trade; Wholesale Trade; Real Estate, Rental & Leasing; Agriculture, Forestry, Fishing & Hunting; Other Services; Transportation & Warehousing; Health Care & Social Assistance; Professional, Scientific & Technical Services; Information; Utilities; and Educational Services. The five industries reporting a decrease in new orders for the month of October are: Arts, Entertainment & Recreation; Construction; Management of Companies & Support Services; Finance & Insurance; and Public Administration.

Employment
Employment activity in the services sector contracted in October for the fifth month in a row. The Employment Index registered 48.2 percent, up 1 percentage point from the September figure of 47.2 percent and its highest since May's reading of 50.7 percent. Comments from respondents include: "Holiday seasonal hiring" and "We have not replaced employees who have left through attrition."

The four industries reporting an increase in employment in October are: Retail Trade; Real Estate, Rental & Leasing; Utilities; and Health Care & Social Assistance. The 10 industries reporting a decrease in employment in October — listed in order — are: Other Services; Arts, Entertainment & Recreation; Finance & Insurance; Transportation & Warehousing; Management of Companies & Support Services; Public Administration; Information; Educational Services; Wholesale Trade; and Professional, Scientific & Technical Services.

Supplier Deliveries
In October, the Supplier Deliveries Index indicated slower supplier performance for the 11th month in a row. The index registered 50.8 percent, down 1.8 percentage points from the 52.6 percent recorded in September. A reading above 50 percent indicates slower deliveries, while a reading below 50 percent indicates faster deliveries. Comments from respondents include: "While global shipping costs and geopolitical factors are influencing pricing, delivery timelines have remained relatively stable, with no major improvements or delays reported" and "The supply chain for high-performance components remains extremely constrained; we experienced unexpected decommits and pushouts from key semiconductor suppliers, making delivery performance slightly worse than the previous month."

The six industries reporting slower deliveries in October — in the following order — are: Wholesale Trade; Transportation & Warehousing; Educational Services; Information; Public Administration; and Professional, Scientific & Technical Services. The three industries reporting faster supplier deliveries for the month of October are: Agriculture, Forestry, Fishing & Hunting; Utilities; and Health Care & Social Assistance. Nine industries reported no change in Supplier Deliveries in the month of October.

Inventories
The Inventories Index was in contraction territory for its second month in a row, registering 49.5 percent, a 1.7-percentage point increase compared to the 47.8 percent reported in September. Of the total respondents in October, 29 percent indicated they do not have inventories or do not measure them. Comments from respondents include: "Increase in inventory due to continued receipt of vaccine inventory for the season" and "Inventory for construction materials is being reduced, as lead times become more consistent."

The six industries reporting an increase in inventories in October — in the following order — are: Transportation & Warehousing; Information; Management of Companies & Support Services; Health Care & Social Assistance; Utilities; and Professional, Scientific & Technical Services. The six industries reporting a decrease in inventories in October — listed in order — are: Arts, Entertainment & Recreation; Educational Services; Public Administration; Other Services; Construction; and Retail Trade. Six industries reported no change in inventories for the month of October.

Prices
Prices paid by services organizations for materials and services increased in October for the 101st consecutive month. The Prices Index registered 70 percent, 0.6 percentage point higher than the 69.4 percent recorded in September. The October reading is the index's highest since October 2022 (70.7 percent) and the 11th straight month above 60 percent, although it breaks a 35-month streak below 70 percent.

Sixteen of the 18 services industries reported an increase in prices paid during the month of October, in the following order: Accommodation & Food Services; Other Services; Real Estate, Rental & Leasing; Information; Management of Companies & Support Services; Wholesale Trade; Professional, Scientific & Technical Services; Finance & Insurance; Retail Trade; Public Administration; Health Care & Social Assistance; Agriculture, Forestry, Fishing & Hunting; Transportation & Warehousing; Educational Services; Utilities; and Construction. Mining was the only industry reporting a decrease in prices paid in October.

NOTE: Commodities reported as up in price and down in price are listed in the commodities section of this report.

Backlog of Orders
The ISM^® Services Backlog of Orders Index was in contraction territory for the eighth consecutive month, and the reading of 40.8 percent was a 6.5-percentage point decrease compared to the 47.3 percent reported in September. Of the total respondents in October, 30 percent indicated they do not measure backlog of orders. Respondent comments include: "Project delays related to the government shutdown" and "Permitting delays, plus additional regulatory burdens."

The five industries reporting an increase in order backlogs in October are: Retail Trade; Educational Services; Transportation & Warehousing; Health Care & Social Assistance; and Wholesale Trade. The seven industries reporting a decrease in order backlogs in October — in the following order — are: Real Estate, Rental & Leasing; Other Services; Mining; Construction; Public Administration; Professional, Scientific & Technical Services; and Agriculture, Forestry, Fishing & Hunting. Six industries reported no change in order backlogs in the month of October.

New Export Orders
Orders and requests for services and other non-manufacturing activities to be provided outside of the U.S. by domestically based companies contracted in October for the fourth straight month and seventh time in the last eight months. The New Export Orders Index registered 47.8 percent, up 1.3 percentage points compared to the September reading of 46.5 percent. Of the total respondents in October, 40 percent indicated they do not perform, or do not separately measure, orders for work outside of the U.S. Respondent comments include: "Customers hesitant to spend capital expenditures" and "For this month, new orders/activity requests are slightly higher than last month, primarily due to year-end ordering patterns creating a small, temporary spike in demand."

The three industries reporting an increase in new export orders in October are: Utilities; Transportation & Warehousing; and Wholesale Trade. The five industries reporting a decrease in new export orders in October are: Real Estate, Rental & Leasing; Accommodation & Food Services; Construction; Finance & Insurance; and Retail Trade. Ten industries reported no change in exports in October.

Imports
The Imports Index dropped further into contraction territory in October, registering 43.7 percent, 5.5 percentage points lower than the 49.2 percent reported in September and the lowest reading since May 2024 (42.8 percent). Thirty-eight percent of respondents reported that they do not use, or do not track the use of, imported materials. Respondent comments include: "Given the administration's trade and tariff policies, we continue to source products in the U.S., Canada or Mexico instead of overseas" and "Adjusting inventory levels down."

The three industries reporting an increase in imports for the month of October are: Agriculture, Forestry, Fishing & Hunting; Utilities; and Wholesale Trade. The seven industries reporting a decrease in imports in October — listed in order — are: Real Estate, Rental & Leasing; Accommodation & Food Services; Management of Companies & Support Services; Other Services; Retail Trade; Transportation & Warehousing; and Professional, Scientific & Technical Services. Eight industries reported no change in imports in October.

Inventory Sentiment
The ISM^® Services Inventory Sentiment Index was in expansion (or "too high") territory for the 30th consecutive month in October; the reading of 55.5 percent is a decrease of 0.2 percentage point from September's figure of 55.7 percent. This reading indicates that respondents feel their companies' inventory levels are too high when correlated to business requirements.

The 12 industries reporting sentiment that their inventories were too high in October — listed in order — are: Mining; Construction; Retail Trade; Wholesale Trade; Utilities; Management of Companies & Support Services; Educational Services; Information; Public Administration; Health Care & Social Assistance; Professional, Scientific & Technical Services; and Transportation & Warehousing. The only industry reporting a decrease in inventory sentiment in October is Other Services.

About This Report
DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire U.S., while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of October 2025.

The data presented herein is obtained from a survey of supply executives in the services sector based on information they have collected within their respective organizations. ISM^® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation
The ISM^®Services PMI^® Report (formerly the Non-Manufacturing ISM^® Report On Business^®) is based on data compiled from purchasing and supply executives nationwide. Membership of the Services Business Survey Panel (formerly Non-Manufacturing Business Survey Committee) is diversified by the North American Industry Classification System (NAICS), based on each industry's contribution to gross domestic product (GDP). The Services Business Survey Panel responses are divided into the following NAICS code categories: Agriculture, Forestry, Fishing & Hunting; Mining; Utilities; Construction; Wholesale Trade; Retail Trade; Transportation & Warehousing; Information; Finance & Insurance; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Management of Companies & Support Services; Educational Services; Health Care & Social Assistance; Arts, Entertainment & Recreation; Accommodation & Food Services; Public Administration; and Other Services (services such as Equipment & Machinery Repairing; Promoting or Administering Religious Activities; Grantmaking; Advocacy; and Providing Dry-Cleaning & Laundry Services, Personal Care Services, Death Care Services, Pet Care Services, Photofinishing Services, Temporary Parking Services, and Dating Services). The data are weighted based on each industry's contribution to GDP. According to U.S. Bureau of Economic Analysis (BEA) estimates (the average of the fourth quarter 2023 GDP estimate and the GDP estimates for first, second, and third quarter 2024, as released on December 19, 2024), the six largest services sectors are: Real Estate, Rental & Leasing; Public Administration; Professional, Scientific, & Technical Services; Health Care & Social Assistance; Information; and Finance & Insurance.

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (Business Activity, New Orders, Backlog of Orders, New Export Orders, Inventory Change, Inventory Sentiment, Imports, Prices, Employment and Supplier Deliveries), this report shows the percentage reporting each response and the diffusion index. Responses represent raw data and are never changed. Data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. All seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them. The remaining indexes have not indicated significant seasonality.

The Services PMI^® is a composite index based on the diffusion indexes for four of the indicators with equal weights: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted) and Supplier Deliveries. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. An index reading above 50 percent indicates that the services economy is generally expanding; below 50 percent indicates that it is generally declining. Supplier Deliveries is an exception. A Supplier Deliveries Index above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries.

A Services PMI^® above 48.6 percent, over time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 48.6 percent, it is generally declining. The distance from 50 percent or 48.6 percent is indicative of the strength of the expansion or decline.

The ISM^®Services PMI^® Reportsurvey is sent out to Services Business Survey Panel respondents in the first part of each month. Respondents are asked to ONLY report on U.S. operations for the current month. ISM^® receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses to give the most accurate picture of current business activity. ISM^® then compiles the report for release on the third business day of the following month.

The industries reporting growth, as indicated in the ISM^®Services PMI^® Report, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

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About Institute for Supply Management ^®
Institute for Supply Management^® (ISM^®) is the first and leading not-for-profit professional supply management organization worldwide. Its community of more than 50,000 in more than 100 countries around the world manage about US$1 trillion in corporate and government supply chain procurement annually. Founded in 1915 by practitioners, ISM is committed to advancing the strategy and practice of integrated, end-to-end supply chain management through leading edge data-driven resources, community, and education to empower individuals, create organizational value and to drive competitive advantage. ISM's vision is to foster a prosperous, sustainable world. ISM empowers and leads the profession through the ISM^® PMI^® Reports (formerly Report On Business^®), its highly regarded certification and training programs, corporate services, events and assessments. The ISM^® PMI^® Reports — Manufacturing and Services — are two of the most reliable economic indicators available, providing guidance to supply management professionals, economists, analysts, and government and business leaders. For more information, please visit: www.ismworld.org. 

The full text version of the ISM^® Services PMI^® Report is posted on ISM^®'s website at www.ismrob.org on the third business day* of every month after 10:00 a.m. ET. The one exception is in January, the report is released on the fourth business day of the month.

The next ISM^® Services PMI^® Report featuring November 2025 data will be released at 10:00 a.m. ET on Wednesday, December 3, 2025.

*Unless the New York Stock Exchange is closed.

SOURCE Institute for Supply Management