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ISM Non-Manufacturing Index increased to 57.1% in June
Economic activity in the non-manufacturing sector grew in June after two consecutive months of contraction, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.
The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: “The NMI® registered 57.1 percent, 11.7 percentage points higher than the May reading of 45.4 percent. This reading represents growth in the non-manufacturing sector after a two-month period of contraction preceded by 122 straight months of expansion. This is the largest single-month percentage-point increase in the NMI® since its debut in 1997. (In April, the index suffered its biggest one-month decrease, a 10.7-percent drop.) The Business Activity Index registered 66 percent, up 25 percentage points from May’s figure of 41 percent. The New Orders Index registered 61.6 percent; 19.7 percentage points higher than the reading of 41.9 percent in May. The Employment Index increased to 43.1 percent; 11.3 percentage points higher than the May reading of 31.8 percent.
“The Supplier Deliveries Index registered at 57.5 percent, down 9.5 percentage points from May’s reading of 67 percent. Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases. The higher index readings the previous three months were primarily a product of supply problems related to the coronavirus (COVID-19) pandemic. The Supplier Deliveries Index now more closely correlates to current supply and demand.
“The Prices Index figure of 62.4 percent is 6.8 percentage points higher than the May reading of 55.6 percent, indicating that prices increased in June. According to the NMI®, 14 non-manufacturing industries reported growth. The non-manufacturing composite index indicated growth after two consecutive months of contraction. The sector’s previous period of contraction was for two months in 2009: November (with an NMI® of 49.5 percent) and December (with an NMI® of 49.7 percent). Respondents remain concerned about the coronavirus and the more recent civil unrest; however, they are cautiously optimistic about business conditions and the economy as businesses are beginning to reopen,” says Nieves.
The 14 non-manufacturing industries reporting growth in June — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Wholesale Trade; Real Estate, Rental & Leasing; Health Care & Social Assistance; Construction; Retail Trade; Utilities; Transportation & Warehousing; Arts, Entertainment & Recreation; Information; Finance & Insurance; Public Administration; and Professional, Scientific & Technical Services. The three industries reporting a decrease in June are: Mining; Other Services; and Management of Companies & Support Services.
Posted: July 6, 2020 Monday 10:00 AM