INDUSTRY PERFORMANCE (Based on the NMI)
The 13 industries reporting growth in January based on the NMI composite index — listed in order — are: Mining; Real Estate, Rental & Leasing; Utilities; Transportation & Warehousing; Management of Companies & Support Services; Finance & Insurance; Information; Accommodation & Food Services; Wholesale Trade; Retail Trade; Construction; Other Services; and Health Care & Social Assistance. The five industries reporting contraction in January are: Arts, Entertainment & Recreation; Agriculture, Forestry, Fishing & Hunting; Educational Services; Professional, Scientific & Technical Services; and Public Administration.
WHAT RESPONDENTS ARE SAYING …
- “New initiatives creating increase in spending.” (Finance & Insurance)
- “Indications are that business is picking up and that 2011 could see positive growth across many industries. We are seeing an increase in orders at the beginning of the year.” (Professional, Scientific & Technical Services)
- “Starting to see higher prices in many areas. Low inventory levels are leading to longer delivery time frames.” (Public Administration)
- “Business uncertainty seems to be subsiding.” (Management of Companies & Support Services)
- “Business activity is picking up. The challenges in the textile market (cotton/polyester) are significantly impacting price along with the inability to secure pricing for a period longer than two months.” (Accommodation & Food Services)
- “2011 looking better than 2010.” (Information)
Indexes reflect newly released seasonal adjustment factors.
COMMODITIES REPORTED UP / DOWN IN PRICE, and IN SHORT SUPPLY
Commodities Up in Price
Airfares (2); Carbon Pipe; Cleaning Products; Copper Products (2); Corn; Cotton (3); Cotton Products (5); #1 Diesel Fuel (4); #2 Diesel Fuel (7); Food and Beverage; Fuel (13); Fuel Surcharges; Gasoline (4); Ground Beef; Heating Fuel (2); Janitorial Supplies; Latex Gloves; Office Supplies; Paper (3); Petroleum Products; Plastic Film; Polyethylene Bags (2); Poly Products; Resin Products; Rubber Products; Soy Oil (2); Steel (2); Steel Pipe and Fittings; and Steel Products (2).
Commodities Down in Price
Chicken; and IT Equipment.
Commodities in Short Supply
Cotton; and Cotton Products.
NMI (Non-Manufacturing Index)
In January, the NMI registered 59.4 percent, indicating continued growth in the non-manufacturing sector for the 14th consecutive month. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.
Business Activity
ISM’s Non-Manufacturing Business Activity Index in January registered 64.6 percent, an increase of 1.7 percentage points when compared to the seasonally adjusted 62.9 percent registered in December. Ten industries reported increased business activity, and three industries reported decreased activity for the month of January. Five industries reported no change from December. Comments from respondents include: “New projects continue to develop and gain approval” and “New year capital budget funds available.”
The industries reporting growth of business activity in January — listed in order — are: Real Estate, Rental & Leasing; Transportation & Warehousing; Utilities; Finance & Insurance; Wholesale Trade; Information; Management of Companies & Support Services; Retail Trade; Accommodation & Food Services; and Public Administration. The industries reporting decreased business activity in January are: Other Services; Arts, Entertainment & Recreation; and Health Care & Social Assistance.
New Orders
ISM’s Non-Manufacturing New Orders Index grew in January for the 18th consecutive month. The index registered 64.9 percent, which is an increase of 3.5 percentage points from the seasonally adjusted 61.4 percent reported in December. Comments from respondents include: “Increase in customer activity” and “Clients feeling better about economy and beginning to release orders.”
The 13 industries reporting growth of new orders in January — listed in order — are: Mining; Real Estate, Rental & Leasing; Utilities; Finance & Insurance; Construction; Transportation & Warehousing; Accommodation & Food Services; Information; Management of Companies & Support Services; Educational Services; Health Care & Social Assistance; Professional, Scientific & Technical Services; and Wholesale Trade. The four industries reporting contraction of new orders in January are: Arts, Entertainment & Recreation; Other Services; Retail Trade; and Public Administration.
Employment
Employment activity in the non-manufacturing sector grew in January, as ISM’s Non-Manufacturing Employment Index registered 54.5 percent. This reflects an increase of 1.9 percentage points when compared to the 52.6 percent registered in December (seasonally adjusted). Six industries reported increased employment, eight industries reported decreased employment, and four industries reported unchanged employment compared to December. Comments from respondents include: “Filling a few key vacancies” and “Increased project activity.”
The industries reporting an increase in employment in January — listed in order — are: Management of Companies & Support Services; Mining; Other Services; Information; Transportation & Warehousing; and Retail Trade. The industries reporting a reduction in employment in January — listed in order — are: Educational Services; Construction; Arts, Entertainment & Recreation; Professional, Scientific & Technical Services; Wholesale Trade; Health Care & Social Assistance; Finance & Insurance; and Public Administration.
Supplier Deliveries
The Supplier Deliveries Index registered 53.5 percent in January, 2 percentage points higher than the 51.5 percent registered in December, indicating that supplier deliveries continued to slow in January. A reading above 50 percent indicates slower deliveries.
The eight industries reporting slower deliveries in January — listed in order — are: Mining; Retail Trade; Wholesale Trade; Construction; Other Services; Accommodation & Food Services; Finance & Insurance; and Public Administration. The two industries reporting faster supplier deliveries in January are: Agriculture, Forestry, Fishing & Hunting; and Transportation & Warehousing. Eight industries reported no change in supplier deliveries for the month of January.
Inventories
ISM’s Non-Manufacturing Inventories Index registered 49 percent in January, indicating that inventory levels contracted in January. Of the total respondents in January, 28 percent indicated they do not have inventories or do not measure them. Comments from respondents include: “Working down inventory in [preparation] for seasonally slow period” and “Holding tight control.”
The six industries reporting an increase in inventories in January — listed in order — are: Mining; Real Estate, Rental & Leasing; Management of Companies & Support Services; Utilities; Health Care & Social Assistance; and Wholesale Trade. The nine industries reporting decreases in inventories in January — listed in order — are: Other Services; Arts, Entertainment & Recreation; Retail Trade; Public Administration; Construction; Transportation & Warehousing; Accommodation & Food Services; Finance & Insurance; and Information.
Prices
Prices paid by non-manufacturing organizations for purchased materials and services increased in January. ISM’s Non-Manufacturing Prices Index for January registered 72.1 percent, 2.6 percentage points higher than the seasonally adjusted 69.5 percent reported in December. In January, the percentage of respondents reporting higher prices is 46 percent, the percentage indicating no change in prices paid is 50 percent, and 4 percent of the respondents reported lower prices.
In January, 17 industries reported an increase in prices paid, in the following order: Utilities; Accommodation & Food Services; Construction; Wholesale Trade; Management of Companies & Support Services; Mining; Real Estate, Rental & Leasing; Finance & Insurance; Educational Services; Arts, Entertainment & Recreation; Other Services; Retail Trade; Health Care & Social Assistance; Public Administration; Information; Transportation & Warehousing; and Professional, Scientific & Technical Services. The only industry reporting prices as decreasing for the month of January is Agriculture, Forestry, Fishing & Hunting.
Backlog of Orders
ISM’s Non-Manufacturing Backlog of Orders Index grew in January after one month of contraction. The index registered 50.5 percent, 2 percentage points higher than the 48.5 percent reported in December. Of the total respondents in January, 43 percent indicated they do not measure backlog of orders.
The seven industries reporting an increase in order backlogs in January — listed in order — are: Utilities; Mining; Information; Transportation & Warehousing; Finance & Insurance; Wholesale Trade; and Public Administration. The four industries reporting lower backlog of orders in January are: Retail Trade; Construction; Other Services; and Professional, Scientific & Technical Services.
New Export Orders
Orders and requests for services and other non-manufacturing activities to be provided outside of the United States by domestically based personnel grew at a slower rate in January. The New Export Orders Index for January registered 53.5 percent, which is 2.5 percentage points lower than the 56 percent registered in December. Of the total respondents in January, 70 percent indicated they either do not perform, or do not separately measure, orders for work outside of the United States.
The six industries reporting an increase in new export orders in January — listed in order — are: Mining; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Information; Transportation & Warehousing; and Wholesale Trade. The four industries reporting a decrease in export orders in January are: Arts, Entertainment & Recreation; Other Services; Retail Trade; and Professional, Scientific & Technical Services. Four industries reported no change in new export orders for the month of January.
Imports
The ISM Non-Manufacturing Imports Index grew in January for the sixth consecutive month. The index registered 53.5 percent, which is 2.5 percentage points higher than the 51 percent reported in December. In January, 59 percent of respondents reported that they do not use, or do not track, the use of imported materials.
The five industries reporting an increase in the use of imports in January are: Agriculture, Forestry, Fishing & Hunting; Information; Accommodation & Food Services; Wholesale Trade; and Transportation & Warehousing. The two industries reporting a decrease in imports for the month of January are: Arts, Entertainment & Recreation; and Retail Trade. Nine industries reported no change in imports for the month of January.
Inventory Sentiment
The ISM Non-Manufacturing Inventory Sentiment Index in January registered 60 percent, which is 1.5 percentage points lower than the 61.5 percent reported in December. This indicates that respondents believe their inventories are too high at this time. In January, 26 percent of respondents said their inventories were too high, 6 percent said their inventories were too low, and 68 percent said their inventories were about right.
The eight industries reporting a feeling that their inventories are too high in January — listed in order — are: Mining; Real Estate, Rental & Leasing; Other Services; Management of Companies & Support Services; Wholesale Trade; Health Care & Social Assistance; Professional, Scientific & Technical Services; and Accommodation & Food Services. The two industries reporting that inventories are too low in January are: Construction and Retail Trade.
