Services economy remains on growth track in November, reports ISM

November services economy output remained on the right side of growth for the second consecutive month, according to the new edition of the Services ISM Report on Business, which was released today by the Institute for Supply Management (ISM).

The November Services PMI, at 52.6 (a reading above 50 represents expansion and below 50 indicates contraction), rose 0.2% over October’s 52.4, with September flat, at 50.0, growing, at a faster rate, for the second consecutive month. Which was preceded by expansion in 13 of the previous 14 months before September.  

The November reading is 0.9% above the 12-month average of 51.7, with December 2024 and May 2025 representing the respective high and low readings over that period, at 54.0 and 49.9, respectively.

ISM reported that 12 of the services sectors it tracks saw growth in November, including: Retail Trade; Arts, Entertainment & Recreation; Accommodation & Food Services; Wholesale Trade; Health Care & Social Assistance; Educational Services; Public Administration; Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Information; Professional, Scientific & Technical Services; and Utilities. Sectors seeing contraction included: Construction; Real Estate, Rental & Leasing; Mining; Management of Companies & Support Services; and Transportation & Warehousing.

The report’s subindexes that factor into the PMI largely were mixed, including:

• Business Activity/Production, at 54.5, up 0.2%, following a 4.4% October gain and growing at a faster rate for the second consecutive month, and topping the 54-mark for the seventh time in 2025, with 11 sectors seeing an increase in business activity;
• New Orders, at 52.9, fell 3.3%, contracting, at a slower rate, for the sixth consecutive month (and expanding in 33 of the last 35 months), with 12 sectors reporting growth;
• Employment, at 48.9, up 0.7%, contracting, at a slower rate, for the sixth consecutive month, with six sectors reporting growth, for its highest reading since May’s 50.7; and
• Supplier Deliveries, at 54.1 (a reading above 50 indicates slower deliveries), up 3.3% from October and slowing, at a faster rate, for the 12^th consecutive month, with nine sectors reporting slower deliveries

Comments from ISM member panelists included in the report highlighted various trends in the services sector, with tariffs and business conditions again receiving a fair amount of attention.

“We are anticipating demand to be consistent with what we have seen in 2025 thus far,” said a Wholesale Trade panelist. “Affordability continues to be a problem for an entire generation of buyers. We expect margins to erode as competitors fight for business. Lumber production is set to be reduced significantly, so prices should increase in 2026.”

An Accommodation & Food Services panelist said that suppliers are very inconsistent on how they are planning and executing pricing related to tariffs—adding that overall uncertainty on how to source and how much to source is as high as during the coronavirus pandemic era.”   

In an interview with LM, Steve Miller, Chair of the ISM Services Business Survey Committee, said that the November Services PMI reading was solid, especially given how the summer months unfolded, coupled with Employment, New Orders, and Supplier Deliveries all seeing gains.

As for the “mindset” of the services economy, in terms of the report’s panelists, Miller observed that 11% indicated they are seeing contraction, or business being down, annually, with 22% saying they are experiencing growth and expansion, with the remaining 67% neutral.

“Tariffs and comments on tariffs are the most frequently discussed topics, but they are down 60% from this summer,” said Miller. “It is the most predominant topic of all of the comments but not at the level it was in the June and July timeframe.

In looking at the differences in Services PMI readings in recent months, Miller said the readings from September to November are up—and for the entire time in which ISM has issued this report, November 2025 represented what he called the “breakeven point,” in which half of the time prior to this report, for this period, the Services PMI was up and, for the other half, it was down, with November 2025 breaking the deadlock, going back to 2009.

“With all the talk about things like tariffs, Ukraine, and what is going on domestically, things are pretty normal,” he said. “A big one for me is when looking at the 12-month [Services PMI] average, it is 10 points below where it was in 2022 and the lowest going back to 2010. It is significantly down in the last three years, in terms of growth, or the expansionary rate, from a PMI perspective. Overall, we are seeing the services economy chug along but at a slower growth rate than we have seen—and taking out all of the bounces up and down, for things like backlog of orders [which rose 8.3%, to 49.1 in November].”