October's ISM Non Manufacturing data offered a mixed bag under the headline number of 52.9. While that reading was under expectations of 53.5, it was only a slight degradation from September's 53. In the underlying data the employment figure jumped from 48.7 to 53.3 so one wonders if the holiday hiring is starting to show up here. As with manufacturing the prices index fell, although nowhere as sharply (57.1 from 61.9). Note that this reading is still well above 50, unlike what we just saw in the manufacturing report. On the negative side new orders dropped from 53.3 to 48.7. Another report indicating nothing dramatic happening in the economy as we muddle along in a slight expansion. Full report here.
The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. The NMI registered 52.9 percent in October, 0.1 percentage point lower than the 53 percent registered in September, and indicating continued growth at a slightly slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased 3.3 percentage points to 53.8 percent, reflecting growth for the 27th consecutive month. The New Orders Index decreased by 4.1 percentage points to 52.4 percent. The Employment Index increased 4.6 percentage points to 53.3 percent, indicating growth in employment after one month of contraction. The Prices Index decreased 4.8 percentage points to 57.1 percent, indicating prices increased at a slower rate in October when compared to September. According to the NMI, eight non-manufacturing industries reported growth in October. Even though there is month-over-month growth in the Employment Index, respondents are still expressing concern over available labor resources and job growth. The continued strong push for inventory reduction by supply management professionals has resulted in contraction in the Inventories Index for the first time in eight months. Respondents' comments are mixed and reflect concern about future business conditions.
WHAT RESPONDENTS ARE SAYING ...
- Business is fairly flat, with a slight increase noted for the month. (Health Care & Social Assistance)
- Sales are increasing slightly, but are still lower than they have been historically. (Public Administration)
- Some slowdown in the last month. (Finance & Insurance)
- Business is steady, with a lot of price competition at the selling end of our business. (Agriculture, Forestry, Fishing & Hunting)
- The poor economy is creating a drag on expected revenue through the end of this year. (Information)
- Overall, we are still growing, but we are beginning to see some cautiousness reflected in our customers. (Wholesale Trade)
|ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE|
COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS*
|Supplier Deliveries||52.0||49.5||+2.5||Slowing||From Faster||1||51.3||51.4||-0.1|
|Backlog of Orders||47.0||52.5||-5.5||Contracting||From Growing||1||47.5||41.5||+6.0|
|New Export Orders||54.0||52.0||+2.0||Growing||Faster||3||50.0||53.5||-3.5|
|Inventory Sentiment||57.5||59.0||-1.5||Too High||Slower||173||N/A||N/A||N/A|
* Non-Manufacturing ISM Report On Business® data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. Manufacturing ISM Report On Business® data is seasonally adjusted for New Orders, Production, Employment, Supplier Deliveries and Inventories.