Services PMI® at 54.4%; December 2025 ISM® Services PMI® Report

Business Activity Index at 56%; New Orders Index at 57.9%; Employment Index at 52%; Supplier Deliveries Index at 51.8%

TEMPE, Ariz., Jan. 7, 2026 /PRNewswire/ -- Economic activity in the services sector continued to expand in December, say the nation's purchasing and supply executives in the latest ISM^® Services PMI^® Report. The Services PMI^® registered at 54.4 percent, finishing 2025 on a positive note with its 10th month in expansion territory — and its highest reading — of the year.

The report was issued today by Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management^® (ISM^®) Services Business Survey Committee: "In December, the Services PMI^® registered a reading of 54.4 percent, 1.8 percentage points higher than the November figure of 52.6 percent and a third consecutive month of expansion. The Business Activity Index continued in expansion territory in December, registering 56 percent, 1.5 percentage points higher than the reading of 54.5 percent recorded in November. The New Orders Index also remained in expansion in December, with a reading of 57.9 percent, 5 percentage points above November's figure of 52.9 percent. The Employment Index expanded for the first time in seven months with a reading of 52 percent, a 3.1-percentage point improvement from the 48.9 percent recorded in November — the fifth consecutive monthly increase since a reading of 46.4 percent in July.

"The Supplier Deliveries Index registered 51.8 percent, 2.3 percentage points lower than the 54.1 percent recorded in November. This is the 13th 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 64.3 percent in December, its lowest level since a reading of 60.9 percent in March 2025. The December figure was a 1.1-percentage point drop from November's reading of 65.4 percent. The index has exceeded 60 percent for 13 straight months.

"The Inventories Index registered 54.2 percent in December, an increase of 0.8 percentage point from November's figure of 53.4 percent and in expansion territory for the second month in a row. The Inventory Sentiment Index expanded for the 32nd consecutive month, registering 54.1 percent, down 0.7 percentage point from November's figure of 54.8 percent. The Backlog of Orders Index was in contraction territory for the 10th month in a row, registering 42.6 percent in December, a 6.5-percentage point decrease from the November figure of 49.1 percent.

"Eleven industries reported growth in December, one fewer than in November, while the number reporting contraction remained at five. The December Services PMI^® reading of 54.4 percent is 2.7 percentage points above the 12-month average of 51.7 percent. However, the 12-month average continues at its lowest level since August 2024 (51.7 percent) for the third month in a row; it's also the second lowest since June 2010 (51.4 percent)."

Miller continues, "December's Services PMI^® is a continuation of a downward trend (as noted in previous reports) of more than 10 percentage points in the 12-month average since February 2022, when it was 62.6 percent. In an encouraging sign, the PMI^® readings in November (52.6 percent) and December are in line with the same months in 2024 (November 52.5 percent; December 54 percent). Also, for the first time since February 2025, all four PMI^® subindexes are in expansion territory. Tariff impacts and seasonality were common themes among panelists' comments. The Employment index returned to expansion for the first time since it registered 50.7 percent in May 2025. The Prices Index figure (64.3 percent) is 1.8 percentage points below the 12-month average of 66.1 percent. Respondents frequently mentioned impacts related to the holiday season and activity increases related to end-of-year activities or preparation for 2026."

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

WHAT RESPONDENTS ARE SAYING

• "We continue to experience higher prices, primarily due to the impact of the administration's trade and tariff policies. We are disproportionately impacted by importing seafood from Southeast Asia and coffee from South America." [Accommodation & Food Services]
• "In general, business is flat. Value brands are still experiencing higher demand. But premium brands struggle to maintain market share." [Agriculture, Forestry, Fishing & Hunting]
• "Rising labor and staffing shortages across facilities and auxiliary services, increasing regulatory and compliance requirements within the state, continued inflationary pressure on supplies and contracted services, ongoing supply-chain variability for specialized equipment and materials, heightened sustainability expectations and state-led environmental initiatives, fluctuations in enrollment affecting institutional budgets and purchasing volumes, and increased competition and pricing volatility in the regional supplier market." [Educational Services]
• "Overall, business is healthy, most of our purchasing is staying consistent, and we are renewing most contracts as we head into the new year." [Finance & Insurance]
• "Flu cases on the rise; the vaccine is not of much help this year. Respiratory equipment and supplies are seeing a surge in demand." [Health Care & Social Assistance]
• "Annual pricing markups from key service and data providers are higher than they've been for many years — gradually drives costs up." [Information]
• "Continuing uncertainty and apprehension regarding tariffs and the resulting impact on pricing." [Public Administration]
• "We expect flat national home prices in 2026, with a forecast of a 0.5-percent increase and a plausible range from a decrease of 3.6 percent to a gain of 4.6 percent. Many metro areas across the country are already posting year-over-year declines, making 2026 the most likely year since 2010 for a modest national price dip." [Real Estate, Rental & Leasing]
• "High business activity due to the holiday season." [Transportation & Warehousing]
• "Year-over-year growth has been coming down for the last three months. Most likely, the government shutdown was a contributor." [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
Aluminum Based Chemicals; Beef; Computer Components; Construction Services; Copper; Copper Products (5); Lab Supplies; Labor (5); Labor — Construction; and Software Licensing (3).

Commodities Down in Price
Cheese (2); Diesel Fuel; Gasoline (10); and Oil.

Commodities in Short Supply
Computer Components; Construction Services; and Electrical Components (2).

Note: The number of consecutive months the commodity is listed is indicated after each item.

DECEMBER 2025 SERVICES INDEX SUMMARIES

Services PMI^®
In December, the Services PMI^® registered 54.4 percent, a 1.8-percentage point increase compared to the November reading of 52.6 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 December Services PMI^® indicates the overall economy is expanding for the 67th straight month. Miller says, "The past relationship between the Services PMI^® and the overall economy indicates that the Services PMI^® for December (54.4 percent) corresponds to a 1.9-percentage point increase in real gross domestic product (GDP) on an annualized basis."

SERVICES PMI^® HISTORY

Business Activity
ISM^®'s Business Activity Index continued in expansion in December; the reading of 56 percent is 1.5 percentage points higher than the 54.5 percent recorded in November. December's reading is the highest since the index registered 58 percent in December 2024. Comments from respondents include: "Construction budgets for renovation, and new projects have significantly swelled" and "Reduced customer orders, reduced new business activities."

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

New Orders
ISM^®'s New Orders Index registered 57.9 percent in December, 5 percentage points higher than the reading of 52.9 percent reported in November. The index has been in expansion territory in 34 of the last 36 months, and December's reading is its highest since registering 59.1 percent in September 2024. Comments from respondents include: "We are seeing lower activity on hydrocarbon chemical construction, but higher in power plant construction" and "End-of-year bookings; seasonally expected increases."

The nine industries reporting an increase in new orders for the month of December — listed in order — are: Mining; Transportation & Warehousing; Finance & Insurance; Arts, Entertainment & Recreation; Other Services; Health Care & Social Assistance; Retail Trade; Information; and Wholesale Trade. The six industries reporting a decrease in new orders for the month of December, in order, are: Management of Companies & Support Services; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Professional, Scientific & Technical Services; Construction; and Educational Services.

Employment
Employment activity in the services sector returned to expansion in December for its first time since May 2025. The Employment Index registered 52 percent, up 3.1 percentage points from the November figure of 48.9 percent. Comments from respondents include: "We are now able to hire more qualified people, as  the labor market appears to be stabilizing" and "Did a reduction in force of roughly 10 percent as a cost-containment measure."

The seven industries reporting an increase in employment in December, in order, are: Accommodation & Food Services; Arts, Entertainment & Recreation; Retail Trade; Agriculture, Forestry, Fishing & Hunting; Real Estate, Rental & Leasing; Utilities; and Public Administration. The seven industries reporting a decrease in employment in December — listed in order — are: Management of Companies & Support Services; Information; Professional, Scientific & Technical Services; Finance & Insurance; Health Care & Social Assistance; Transportation & Warehousing; and Educational Services.

Supplier Deliveries
In December, the Supplier Deliveries Index indicated slower performance for the 13th month in a row. The index registered 51.8 percent, down 2.3 percentage points from the 54.1 percent recorded in November. A reading above 50 percent indicates slower deliveries, while a reading below 50 percent indicates faster deliveries. Comments from respondents include: "The current data shows that supplier deliveries have improved since October and November" and "Longer lead times for equipment."

The seven industries reporting slower deliveries in December — in the following order — are: Management of Companies & Support Services; Accommodation & Food Services; Transportation & Warehousing; Information; Professional, Scientific & Technical Services; Health Care & Social Assistance; and Public Administration. The two industries reporting faster supplier deliveries for the month of December are: Construction; and Utilities. Nine industries reported no change in Supplier Deliveries in the month of December.

Inventories
The Inventories Index continued in expansion territory, registering 54.2 percent, a 0.8-percentage point increase compared to the 53.4 percent reported in November. Of the total respondents in December, 28 percent indicated they do not have inventories or do not measure them. Comments from respondents include: "Trying to increase inventory to smooth out back orders" and "Beginning to wind down for slowing winter business levels and end-of-year inventory counts."

The nine industries reporting an increase in inventories in December — in the following order — are: Arts, Entertainment & Recreation; Retail Trade; Finance & Insurance; Professional, Scientific & Technical Services; Agriculture, Forestry, Fishing & Hunting; Information; Transportation & Warehousing; Educational Services; and Public Administration. The two industries reporting a decrease in inventories in December are: Wholesale Trade; and Health Care & Social Assistance. Seven industries reported no change in Inventories in the month of December.

Prices
Prices paid by services organizations for materials and services increased in December for the 103rd consecutive month. The Prices Index registered 64.3 percent, 1.1 percentage points lower than the 65.4 percent recorded in November.

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

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 10th consecutive month, and the reading of 42.6 percent was a 6.5-percentage point decrease compared to the 49.1 percent reported in November. Of the total respondents in December, 28 percent indicated they do not measure backlog of orders. Respondent comments include: "Backlog orders met; reduced customer demands and requirements" and "Manufacturer product lead times are improving."

The four industries reporting an increase in order backlogs in December are: Transportation & Warehousing; Finance & Insurance; Wholesale Trade; and Professional, Scientific & Technical Services. The 10 industries reporting a decrease in order backlogs in December — in the following order — are: Real Estate, Rental & Leasing; Other Services; Mining; Agriculture, Forestry, Fishing & Hunting; Management of Companies & Support Services; Retail Trade; Public Administration; Utilities; Information; and Construction.

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 expanded in December for the fourth time in 2025. The New Export Orders Index registered 54.2 percent, up 5.5 percentage points compared to the November reading of 48.7 percent and its highest reading since September 2024 (56.7 percent). Of the total respondents in December, 41 percent indicated they do not perform, or do not separately measure, orders for work outside of the U.S. Respondent comments include: "With Lunar New Year approaching, exports are higher than last month but lower than the same month last year" and "Preparing for the first quarter, our busiest time of year."

The six industries reporting an increase in new export orders in December, in order, are: Arts, Entertainment & Recreation; Other Services; Transportation & Warehousing; Information; Finance & Insurance; and Wholesale Trade. The four industries reporting a decrease in new export orders in December are: Real Estate, Rental & Leasing; Educational Services; Retail Trade; and Professional, Scientific & Technical Services. Eight industries reported no change in exports in December.

Imports
The Imports Index climbed out of contraction territory in December, registering 50.3 percent, 1.4 percentage points higher than the 48.9 percent reported in November. Thirty-seven percent of respondents reported that they do not use, or do not track the use of, imported materials. Respondent comments include: "Typically higher for us, as we are building inventory for the spring season" and "Tariffs, supplier headwinds, logistics cost increases."

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

Inventory Sentiment
The ISM^® Services Inventory Sentiment Index was in expansion (or "too high") territory for the 32nd consecutive month in December; the reading of 54.1 percent is a decrease of 0.7 percentage point from November's figure of 54.8 percent. This reading indicates that respondents feel their companies' inventory levels are too high when correlated to business requirements.

The nine industries reporting sentiment that their inventories were too high in December — listed in order — are: Wholesale Trade; Construction; Other Services; Retail Trade; Utilities; Agriculture, Forestry, Fishing & Hunting; Educational Services; Information; and Health Care & Social Assistance. The two industries reporting a decrease in inventory sentiment in December are: Public Administration; and Transportation & Warehousing. Seven industries reported no change in inventory sentiment in December.

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 December 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^® Report survey 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.

ISM PMI^® Content
The Institute for Supply Management^® ("ISM^®") PMI^® Reports, formerly Report On Business^®, (Manufacturing and Services reports) ("ISM PMI^®") contain information, text, files, images, video, sounds, musical works, works of authorship, applications, and any other materials or content (collectively, "Content") of ISM ("ISM PMI^® Content"). ISM PMI^® Content is protected by copyright, trademark, trade secret, and other laws, and as between you and ISM, ISM owns and retains all rights in the ISM PMI^® Content. ISM hereby grants you a limited, revocable, nonsublicensable license to access and display on your individual device the ISM PMI^® Content (excluding any software code) solely for your personal, non-commercial use. The ISM PMI^® Content shall also contain Content of users and other ISM licensors. Except as provided herein or as explicitly allowed in writing by ISM, you shall not copy, download, stream, capture, reproduce, duplicate, archive, upload, modify, translate, publish, broadcast, transmit, retransmit, distribute, perform, display, sell, or otherwise use any ISM PMI^® Content.

Except as explicitly and expressly permitted by ISM, you are strictly prohibited from creating works or materials (including but not limited to tables, charts, data streams, time-series variables, fonts, icons, link buttons, wallpaper, desktop themes, online postcards, montages, mashups and similar videos, greeting cards, and unlicensed merchandise) that derive from or are based on the ISM PMI^® Content. This prohibition applies regardless of whether the derivative works or materials are sold, bartered or given away. You shall not either directly or through the use of any device, software, internet site, web-based service, or other means remove, alter, bypass, avoid, interfere with or circumvent any copyright, trademark, or other proprietary notices marked on the Content or any digital rights management mechanism, device, or other content protection or access control measure associated with the Content including geo-filtering mechanisms. Without prior written authorization from ISM, you shall not build a business utilizing the Content, whether or not for profit.

You shall not create, recreate, distribute, incorporate in other work or advertise an index of any portion of the Content unless you receive prior written authorization from ISM. Requests for permission to reproduce or distribute ISM PMI^® Content can be made by contacting in writing at: ISM Research, Institute for Supply Management, 309 West Elliot Road, Suite 113, Tempe, Arizona 85284-1556, or by emailing [email protected]; Subject: Content Request.

ISM shall not have any liability, duty or obligation for or relating to the ISM PMI^® Content or other information contained herein, any errors, inaccuracies, omissions or delays in providing any ISM PMI^® Content or for any actions taken in reliance thereon. In no event shall ISM be liable for any special, incidental, or consequential damages arising out of the use of the ISM PMI^®. Report On Business^®, PMI^®, Manufacturing PMI^®, Services PMI^®, and Hospital PMI^® are registered trademarks of Institute for Supply Management^®. Institute for Supply Management^® and ISM^® are registered trademarks of Institute for Supply Management, Inc.

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 January 2026 data will be released at 10:00 a.m. ET on Wednesday, February 4, 2026.

*Unless the New York Stock Exchange is closed.

SOURCE Institute for Supply Management

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