June Non-Manufacturing ISM Report On Business® Released

Posted by Heidi Schwartz

Issued on July 3, 2013, the latest Non-Manufacturing ISM Report On Business® registered 52.2% in June, 1.5 percentage points lower than the 53.7% registered in May. This indicates continued growth at a slightly slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 51.7%, which is 4.8 percentage points lower than the 56.5% reported in May, reflecting growth for the 47th consecutive month. The New Orders Index decreased by 5.2 percentage points to 50.8%, and the Employment Index increased 4.6 percentage points to 54.7%, indicating growth in employment for the 11th consecutive month. The Prices Index increased 1.4 percentage points to 52.5%, indicating prices increased at a faster rate in June when compared to May.

Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management Non-Manufacturing Business Survey Committee says, “According to the NMI, 14 non-manufacturing industries reported growth in June. Respondents’ comments are mixed about business conditions depending upon the industry and company. The majority indicate that growth has been slow and incremental; however, it is still better year over year.”

The 14 non-manufacturing industries reporting growth in June — listed in order — are:  Management of Companies & Support Services; Arts, Entertainment & Recreation; Transportation & Warehousing; Wholesale Trade; Retail Trade; Information; Accommodation & Food Services; Utilities; Real Estate, Rental & Leasing; Public Administration; Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Construction; and Professional, Scientific & Technical Services. The four industries reporting contraction in June are: Mining; Other Services; Educational Services; and Health Care & Social Assistance.

ISM’s Non-Manufacturing Business Activity Index in June registered 51.7 percent, 4.8 percentage points lower than the 56.5% registered in May. This month’s reading reflects the lowest level for the index since November 2009, when the index registered 50.9%. Eleven industries reported increased business activity, and seven industries reported decreased activity for the month of June. Comments from respondents include: “More back to normal after spike” and “Projects are wrapping up and not being replaced.”

Employment activity in the non-manufacturing sector grew in June for the 11th consecutive month. ISM’s Non-Manufacturing Employment Index registered 54.7 percent, which reflects an increase of 4.6 percentage points when compared to the 50.1 percent registered in May. Ten industries reported increased employment, and five industries reported decreased employment. Comments from respondents include: “Hiring additional resources for new orders” and “Continued growth of business.”

The industries reporting an increase in employment in June — listed in order — are:  Management of Companies & Support Services; Transportation & Warehousing; Information; Public Administration; Wholesale Trade; Construction; Finance & Insurance; Arts, Entertainment & Recreation; Accommodation & Food Services; and Retail Trade. The industries reporting a reduction in employment in June are: Mining; Other Services; Agriculture, Forestry, Fishing & Hunting; Utilities; and Health Care & Social Assistance.

The Non-Manufacturing ISM Report On Business® is based on data compiled from purchasing and supply executives nationwide. The NMI (Non-Manufacturing Index) is a composite index based on the diffusion indexes for four of the indicators with equal weights: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted) and Supplier Deliveries. July 2013 data will be released at 10:00 a.m. (ET) on Monday, August 5, 2013.