US services growth slows amid rising prices

Amid robust demand, firms are finding it hard to replenish depleted inventories due to global supply chain snarls

The dominant services sector saw growth slow in May, while price gains pulled back from the blistering pace in the prior month but remained high, according to an industry survey released Friday.

Amid robust demand, firms also are finding it hard to replenish depleted inventories due to the ongoing global supply chain snarls, according to the Institute for Supply Management (ISM).

ISM's services index fell 1.2 points to 55.9 per cent, indicating strong but easing growth due to a decline in business activity and slowing supplier deliveries.

The prices index dropped from the all-time high of 84.6 per cent in April, decreasing 2.5 percentage points to 82.1 per cent, the survey showed.

"Growth continues -- albeit slower -- for the services sector, which has expanded for all but two of the last 148 months," survey chair Anthony Nieves said in a statement.

"Covid-19 continues to disrupt the services sector, as well as the war in Ukraine. Labour is still a big issue, and prices continue to increase," he said.

Survey respondents noted strong demand but long delays for orders, and ongoing headaches due to the shortage of workers.

One executive in the utilities industry described the situation as  "exhausting."