INDUSTRY PERFORMANCE (Based on the NMI)
The 15 industries reporting growth in June based on the NMI composite index — listed in order — are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Agriculture, Forestry, Fishing & Hunting; Information; Mining; Accommodation & Food Services; Transportation & Warehousing; Wholesale Trade; Management of Companies & Support Services; Public Administration; Construction; Utilities; Health Care & Social Assistance; Retail Trade; and Professional, Scientific & Technical Services. The two industries reporting contraction in June are: Other Services and Finance & Insurance.
WHAT RESPONDENTS ARE SAYING …
- “The general upswing in the economy, albeit minor, has had a positive effect.” (Arts, Entertainment & Recreation)
- “Pricing pressures continue to increase as we see the economy begin to improve. Orders are still lagging in our industry.” (Professional, Scientific & Technical Services)
- “Slow pace, but better than last year at this time.” (Accommodation & Food Services)
- “Funding issues and cash flow issues continue to affect public sector procurement. Almost all capital acquisitions have been suspended.” (Public Administration)
- “We have seen a slight improvement in business activity over the past month.” (Wholesale Trade)
COMMODITIES REPORTED UP / DOWN IN PRICE, and IN SHORT SUPPLY
Commodities Up in Price
Beef (3); Copier Paper; Corrugated Products (4); Cotton Products (2); Fiberglass Insulation; Food & Beverage; Fuel(c) (6); Medical Supplies; Paper Products; Pork (2); Services; Steel (2); and Steel Products (5).
Commodities Down in Price
Copper Products; Diesel Fuel; Fuel(c); Gasoline; and Poly Products.
Commodities in Short Supply
No commodities are reported in short supply.
Note: The number of consecutive months the commodity is listed is indicated after each item.
(c) Reported as both up and down in price.
JUNE 2010 NON-MANUFACTURING INDEX SUMMARIES
NMI (Non-Manufacturing Index)
In June, the NMI registered 53.8 percent, indicating continued growth in the non-manufacturing sector for the sixth consecutive month, but at a slightly slower rate than in May. 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 June registered 58.1 percent, a decrease of 3 percentage points when compared to the 61.1 percent registered in May. Fourteen industries reported increased business activity, and two industries reported decreased activity for the month of June. Two industries reported no change from May. Comments from respondents include: “Promotions and sales activity from months ago starting to pay off” and “Increasing demand.”
The industries reporting growth of business activity in June — listed in order — are: Real Estate, Rental & Leasing; Information; Accommodation & Food Services; Agriculture, Forestry, Fishing & Hunting; Mining; Arts, Entertainment & Recreation; Public Administration; Transportation & Warehousing; Wholesale Trade; Utilities; Management of Companies & Support Services; Professional, Scientific & Technical Services; Educational Services; and Health Care & Social Assistance. The two industries reporting decreased business activity in June are: Retail Trade and Other Services.
New Orders
ISM’s Non-Manufacturing New Orders Index grew in June for the 10th consecutive month. The index registered 54.4 percent, which is a decrease of 2.7 percentage points from the 57.1 percent reported in May. Comments from respondents include: “Increasing demand” and “Greater utilization of strategic sourcing opportunities.”
The 10 industries reporting growth of new orders in June — listed in order — are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Agriculture, Forestry, Fishing & Hunting; Mining; Information; Transportation & Warehousing; Accommodation & Food Services; Management of Companies & Support Services; Wholesale Trade; and Public Administration. The only industry reporting contraction of new orders in June is Other Services.
Employment
Employment activity in the non-manufacturing sector contracted in June after one month of growth. ISM’s Non-Manufacturing Employment Index for June registered 49.7 percent. This reflects a decrease of 0.7 percentage point when compared to the 50.4 percent registered in May. Eight industries reported increased employment, seven industries reported decreased employment, and three industries reported unchanged employment compared to May. Comments from respondents include: “All open positions either frozen or being eliminated. New early retirement incentives will further deplete the workforce” and “Result of attrition and hiring freeze.”
The industries reporting an increase in employment in June — listed in order — are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Retail Trade; Management of Companies & Support Services; Wholesale Trade; Transportation & Warehousing; Health Care & Social Assistance; and Information. The industries reporting a reduction in employment in June — listed in order — are: Other Services; Utilities; Professional, Scientific & Technical Services; Finance & Insurance; Public Administration; Accommodation & Food Services; and Educational Services.
Supplier Deliveries
The Supplier Deliveries Index registered 53 percent in June, the same rate as registered in May, and indicating that supplier deliveries continued to slow in June. A reading above 50 percent indicates slower deliveries.
The nine industries reporting slower deliveries in June — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Construction; Other Services; Utilities; Information; Accommodation & Food Services; Professional, Scientific & Technical Services; Wholesale Trade; and Transportation & Warehousing. The two industries reporting faster supplier deliveries in June are: Educational Services and Finance & Insurance.
Inventories
ISM’s Non-Manufacturing Inventories Index registered 58.5 percent in June, indicating that inventory levels grew in June for the third consecutive month. Of the total respondents in June, 33 percent indicated they do not have inventories or do not measure them. Comments from respondents include: “Using what we have and not replenishing stock” and “Cash flow shortage is preventing ordering.”
The eight industries reporting an increase in inventories in June — listed in order — are: Real Estate, Rental & Leasing; Other Services; Utilities; Information; Management of Companies & Support Services; Arts, Entertainment & Recreation; Professional, Scientific & Technical Services; and Wholesale Trade. The three industries reporting decreases in inventories in June are: Accommodation & Food Services; Finance & Insurance; and Retail Trade.
Prices
Prices paid by non-manufacturing organizations for purchased materials and services increased in June, but at a slower rate than in May. ISM’s Non-Manufacturing Prices Index for June registered 53.8 percent, 6.8 percentage points lower than the 60.6 percent reported in May. In June, the percentage of respondents reporting higher prices is 27 percent, the percentage indicating no change in prices paid is 64 percent, and 9 percent of the respondents reported lower prices.
In June, 10 industries reported an increase in prices paid, in the following order: Construction; Accommodation & Food Services; Arts, Entertainment & Recreation; Wholesale Trade; Retail Trade; Utilities; Health Care & Social Assistance; Public Administration; Professional, Scientific & Technical Services; and Educational Services. The two industries reporting prices as decreasing for the month of June are: Finance & Insurance and Information.
Backlog of Orders
ISM’s Non-Manufacturing Backlog of Orders Index grew in June for the second consecutive month. The index registered 55.5 percent, 0.5 percentage point lower than the 56 percent reported in May. Of the total respondents in June, 44 percent indicated they do not measure backlog of orders.
The eight industries reporting an increase in order backlogs in June — listed in order — are: Information; Management of Companies & Support Services; Other Services; Construction; Transportation & Warehousing; Public Administration; Accommodation & Food Services; and Finance & Insurance. The four industries reporting lower backlog of orders in June are: Utilities; Educational Services; Professional, Scientific & Technical Services; and Wholesale Trade.
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 contracted in June after three consecutive months of growth. The New Export Orders Index for June registered 48 percent, which is 5.5 percentage points lower than the 53.5 percent registered in May. Of the total respondents in June, 71 percent indicated they either do not perform, or do not separately measure, orders for work outside of the United States.
The four industries reporting an increase in new export orders in June are: Construction; Management of Companies & Support Services; Information; and Arts, Entertainment & Recreation. The three industries reporting a decrease in export orders in June are: Wholesale Trade; Agriculture, Forestry, Fishing & Hunting; and Professional, Scientific & Technical Services.
Imports
The ISM Non-Manufacturing Imports Index contracted in June after three consecutive months of growth. The index registered 48 percent, which is 8.5 percentage points lower than the 56.5 percent reported in May. In June, 63 percent of respondents reported that they do not use, or do not track, the use of imported materials.
The three industries reporting an increase in the use of imports in June are: Information; Professional, Scientific & Technical Services; and Arts, Entertainment & Recreation. The three industries reporting a decrease in imports for the month of June are: Mining; Agriculture, Forestry, Fishing & Hunting; and Wholesale Trade.
Inventory Sentiment
The ISM Non-Manufacturing Inventory Sentiment Index in June registered 59 percent. This is 1.5 percentage points lower than the 60.5 percent reported in May, indicating that respondents believe their inventories are too high at this time. In June, 25 percent of respondents said their inventories were too high, 7 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 June — listed in order — are: Professional, Scientific & Technical Services; Construction; Finance & Insurance; Accommodation & Food Services; Public Administration; Information; Wholesale Trade; and Health Care & Social Assistance. The only industry reporting that inventories are too low in June is Agriculture, Forestry, Fishing & Hunting.
