US services activity edges up in July: Survey

On August 5, the United States saw a marginal increase in services sector activity for July, according to data released by the Institute for Supply Management (ISM). The services index rose by 0.1 percentage point to 54.1%, slightly below the expectation. While new orders and business activity increased, the employment index contracted, according to the report.

ISM survey chair Steve Miller acknowledged that the Middle East conflict and tariff impacts were mentioned by respondents but less frequently than in previous reports. He also noted that the World Cup boosted business activity and new orders. Miller stated that the US services economy remains "resilient," but concerns persist over mortgage and inflation rates, as well as pricing impacts due to recent petroleum cost hikes.

The rising energy costs, both in the US and globally, have been attributed to US-Israeli strikes targeting Iran, which led Iran to nearly block the Strait of Hormuz. This waterway is crucial for global energy transit, and its control has become a point of contention in conflict negotiations. Iran has tightened its grip on Hormuz, seeking powers it did not possess before the war began in late February, such as controlling the strait and charging tolls.

The construction sector reported that sales continue to decline despite increased discounts, citing mounting cost pressures from all fronts. In the public administration sector, respondents expressed uncertainty about how the Iran conflict will impact oil prices and the subsequent effects on construction and other materials. They also noted that the city has several capital projects pending and ongoing, which will be affected by these developments.