Thirteen industries, including retail trade, information, construction, public administration, utilities as well as mining, finance and insurance reported growth. The healthcare and social assistance sector was one of the four industries that contracted last month.
Comments from purchasing managers highlighted growing cost pressures, with some in the transportation and warehousing sector saying that while conditions were largely unchanged from June, prices continued to rise "driven mainly by fuel and labor costs." Some businesses in the utilities sector reported that "electric utility materials continue to be in high demand, causing competition among utilities for production slots." Others said "more suppliers are requiring progress payments or a down payment on goods."
Businesses in the agriculture, forestry, fishing and hunting sector said volumes were "slightly down for the year." Some wholesalers reported that "lumber supply is tighter, and freight rates and availability are challenges." They also noted that "many of our builders are pushing back hard on price increases."
The survey's measure of new orders received by services businesses jumped to 57.2 from 55.1 in June, likely related to ongoing front-loading as businesses try to avoid shortages and higher prices from the Middle East conflict. The recently ended FIFA World Cup tournament also likely provided a lift.
Strong orders would suggest that domestic demand, mainly consumer spending and artificial intelligence-related business investment, retained its robust pace of growth early in the third quarter. New orders were also boosted by strength in exports. But growth in backlog orders slowed considerably.
Suppliers taking longer to deliver
Suppliers continued to struggle to keep up with demand. The survey's measure of supplier deliveries slipped to 52.8 from 54.4. A reading above 50 indicates slower deliveries.
The ISM said comments from purchasing managers noted that "some smaller suppliers are starting to be stressed financially, causing delays in shipments, missed shipments and other issues." It said others reported that "lead times are doubling on specific electrical conductor."
Among the products in short supply last month were aluminum, electronic components, memory components and steel.
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