August NMI Indicating Growth in the U.S.
In August, the Non-Manufacturing Index (NMI) registered 53.3 percent, indicating continued growth in the U.S. non-manufacturing sector for the 21st consecutive month.Economic activity in the non-manufacturing sector grew in August for the 21st consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business.
Business Activity Index at 55.6%
New Orders Index at 52.8%
Employment Index at 51.6%
The report was issued by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management (ISM) Non-Manufacturing Business Survey Committee. “The NMI registered 53.3 percent in August, 0.6 percentage point higher than the 52.7 percent registered in July, and indicating continued growth at a slightly faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased 0.5 percentage point to 55.6 percent, reflecting growth for the 25th consecutive month, but at a slower rate than in July. The New Orders Index increased by 1.1 percentage points to 52.8 percent. The Employment Index decreased 0.9 percentage point to 51.6 percent, indicating growth in employment for the 12th consecutive month, but at a slower rate than in July. The Prices Index increased 7.6 percentage points to 64.2 percent, indicating that prices increased at a faster rate in August when compared to July. According to the NMI, 10 non-manufacturing industries reported growth in August. Respondents’ comments remain mixed. There is a degree of uncertainty concerning business conditions for the balance of the year.”
INDUSTRY PERFORMANCE
The 10 non-manufacturing industries reporting growth in August based on the NMI composite index — listed in order — are: Mining; Information; Retail Trade; Wholesale Trade; Transportation & Warehousing; Accommodation & Food Services; Agriculture, Forestry, Fishing & Hunting; Utilities; Public Administration; and Professional, Scientific & Technical Services. The five industries reporting contraction in August are: Educational Services; Arts, Entertainment & Recreation; Management of Companies & Support Services; Health Care & Social Assistance; and Finance & Insurance.
Business Activity
ISM’s Non-Manufacturing Business Activity Index in August registered 55.6 percent, a decrease of 0.5 percentage point when compared to the 56.1 percent registered in July.
New Orders
ISM’s Non-Manufacturing New Orders Index grew in August for the 25th consecutive month. The index registered 52.8 percent, an increase of 1.1 percentage points from the 51.7 percent reported in July.
Employment Activity
Employment activity in the non-manufacturing sector grew in August, as ISM’s Non-Manufacturing Employment Index registered 51.6 percent. This reflects a decrease of 0.9 percentage point when compared to the 52.5 percent registered in July.
Supplier Deliveries
The Supplier Deliveries Index registered 53 percent in August, 2.5 percentage points higher than the 50.5 percent registered in July, indicating that supplier deliveries continued to slow in August.
Inventories
ISM’s Non-Manufacturing Inventories Index registered 53.5 percent in August, 3 percentage points lower than the 56.5 percent reading that was reported in July. Of the total respondents in August, 27 percent indicated they do not have inventories or do not measure them.
Prices
Prices paid by non-manufacturing organizations for purchased materials and services increased substantially in August. ISM’s Non-Manufacturing Prices Index for August registered 64.2 percent, 7.6 percentage points higher than the 56.6 percent reported in July.
New Orders
Orders and requests for services and other non-manufacturing activities to be provided outside of the United States by domestically based personnel grew in August after one month of contraction. The New Export Orders Index for August registered 56.5 percent, which is 7.5 percentage points higher than the 49 percent reported in July.
Imports
The ISM Non-Manufacturing Imports Index grew in August following two consecutive months of contraction. The index registered 53.5 percent, which is 6 percentage points higher than the 47.5 percent reported in July.
Inventory Sentiment
The ISM Non-Manufacturing Inventory Sentiment Index in August registered 56 percent, which is 3.5 percentage points lower than the 59.5 percent reported in July. This indicates that respondents believe their inventories are still too high at this time.
About this Report
The data presented herein is obtained from a survey of non-manufacturing supply managers based on information they have collected within their respective organizations. The Non-Manufacturing ISM Report On Business is based on data compiled from purchasing and supply executives across the United States. Survey responses reflect the change, if any, in the current month compared to the previous month. Data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. All seasonal adjustment factors are supplied by the U.S. Department of Commerce.
An index reading above 50 percent indicates that the non-manufacturing economy in that index is generally expanding; below 50 percent indicates that it is generally declining. Supplier Deliveries is an exception. A Supplier Deliveries Index above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries.
The Non-Manufacturing ISM Report On Business is published monthly by the Institute for Supply Management, the largest supply management research and education organization in the United States. The Institute for Supply Management, established in 1915, is the largest supply management organization in the world. The full text version is posted on ISM’s Web site at www.ism.ws .
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