Somehow service sector still on its feet

As was the case with the manufacturing survey earlier this week, the ISM non-manufacturing index got a boost from delayed deliveries, but business activity at 48.0 is a less-bad fall than many feared.

Businesses Can’t Get Their Hands on Stuff They Need

• The ISM non-manufacturing index came in at 52.5 defying widespread expectations for this measure to crater in the face of the COVID-19 shutdown in service sector activity. The consensus call was nearly 10 points lower at 43.0. 
• Part of the beat had to do with supplier deliveries. The longer the wait-time the higher this goes, as that is usually a sign of brisk business though now it reflects supply chain problems

Orders Still Up, Inventories and Imports both Fall

• Remarkably new orders at 52.9 are still rising for nonmanufacturing firms though that component did fall more than 10 points since February. Order backlogs are in expansion as well, even moving up slightly from February, though this too is apt to reflect supply chain disruption rather than a demand surge. 
• Imports and inventories both cratered during the month. In fact both measures fell 12.4 points to tie for the biggest decline.

Download The Full Economic Indicators