June 03, 2021 | 10:42
All Our Representatives Are Busy; Please Hold. Your Call Is Important To Us
Now serving #1,234,999,999!
Wow.... this is what happens when the doors swing open, with stores, restaurants, theaters, gyms, offices, welcoming their customers back with open arms. From a distance, of course. But you get the idea.
The U.S. ISM services PMI rose 1.3 pts to a record high 64.0 in May, beating expectations. All 18 industries reported growth last month. Current activity and new orders added to the headline, but the shortages of available workers and stuff (for lack of a better word) were evident. The employment component fell for the first time since February, down 3.5 pts to a 3-mth low of 55.3. This puts a bit of downside risk for tomorrow's official jobs report, even in the face of the steady improvement in initial claims. All surveys have shown that finding qualified workers, or any workers, is one of the biggest problems businesses face.
This is on top of securing supplies to run their businesses... getting your order in and having the supplies transported over. A record one-third of respondents said that inventories were too low. This should, in theory, be positive as it points to more activity to rebuild one's stockpiles ... but that is only if there are enough inputs to create these products. The supplier deliver delays index hit a one-year high of 70.4 last month, and that is spilling over into price pressures. The prices paid index reached a 15½-year high last month of 80.6, as all commodities were reported up in price (none were cheaper). Also note that the backlog of orders also hit a record high in May.
The comments were long ....all mentioned labor and supply problems (or some combination of the two), higher prices, and how these issues are having an impact. One interesting one worth sharing was from the Professional, Scientific & Technical Services industry..... "Small businesses in the area are reporting stimulus checks and extension of unemployment are hampering their ability to hire workers. Seasonal labor and H-2B (visa) workers are in very short supply, causing an uptick in cost per hour. Some employers are reporting they are offering cash incentives of (US)$50 if you show up for an interview.”
Bottom Line: There is a lot of work/demand out there. Just need to meet them.