Home Depot sees service demand hold as hiring and delivery lag

Busy service work kept coming through even as staffing and delivery performance stayed uneven, a mix that can leave Home Depot associates handling more project tasks, tighter scheduling and longer backfill gaps on the sales floor.

The Institute for Supply Management said its May 2026 Services PMI held at 54.5 percent, the 23rd straight month in expansion. Business activity came in at 57.7 percent and new orders at 57.3 percent, a sign that customers were still spending on installations, contractor jobs and other service-heavy work. But the Employment Index fell to 47.9 percent and stayed in contraction for a third month, a mismatch that matters in stores where demand is steady but hiring is not keeping pace.

That gap shows up in the day-to-day work. When orders keep coming, but staffing does not rise with them, associates are the ones who absorb the extra pressure: more pro desk conversations, more follow-up on deliveries, more handoffs between departments and more cross-training to cover gaps. The report also showed slower delivery performance, with the Supplier Deliveries Index at 55.2 percent for the 18th straight month of slower movement, while the Prices Index jumped to 71.3 percent, its highest reading since August 2022. Inventories climbed to 62.5 percent, the highest level since services data collection began in 1997, and the Backlog of Orders Index stayed in expansion at 51.3 percent for a fourth straight month.

Home Depot has been telling investors to expect that kind of uneven operating environment. On May 19, the company reported first-quarter fiscal 2026 sales of $41.8 billion, with comparable sales up 0.6 percent overall and 0.4 percent in the United States. Adjusted diluted earnings per share came in at $3.43, and the company reaffirmed full-year fiscal 2026 guidance. Management said underlying demand was relatively similar to fiscal 2025 despite greater consumer uncertainty and housing affordability pressure.

For store teams, the most important detail is where the work is landing. Home Depot said its Pro business outperformed DIY in the quarter, with the strongest Pro comping in complex purchase occasions. That lines up with the company’s Pro Forecast page, which is built to help pros track labor and employment trends, the supply chain, housing, materials and the broader U.S. economy. The company also said SRS Division sales reached $4 billion, underscoring how much of the business now runs through installation, contractor coordination and delivery scheduling rather than simple walk-in sales. When service demand holds and hiring lags, the pressure does not stay on a spreadsheet. It lands in the aisle, at the desk and on the clock.