Service-oriented businesses such as banks, retailers and drug stores grew in November at the fastest pace on record, a new survey showed, even as companies grappled with major shortages of labor and supplies.
The Institute for Supply Management’s services PMI climbed to 69.1% last month from 66.7% in October, marking the biggest increase on record. The survey results go back to 1997.
Economists polled by The Wall Street Journal forecast the index to fall to 65%.
Any number over 50% signals expansion, and numbers above 60% are exceptional.
In a rarity, all 18 of the service sectors tracked by ISM said they grew in November.
Demand is not a problem. Americans are still spending lots of money these days after hunkering down early in the pandemic.
The biggest problem is supplying all the services that customers want. Companies can’t find enough people to fill a near-record number of open jobs. They’ve also struggled to obtain badly needed supplies.
The shortages have pushed up wages and prices and contributed to the biggest surge in U.S. inflation in 31 years.
“Seeing inflationary forces in the marketplace, which is resulting in suppliers raising their prices moving into 2022,” said an executive at financial company.
Some executives said the worst of the supply-chain bottlenecks might be easing, but they expect the problems to be ongoing.
“Supply chain issues persist, but we’re evolving to overcome or manage them better than in the past,” another executive said.