INDUSTRY PERFORMANCE (Based on the NMI)
The 16 industries reporting growth in March based on the NMI composite index — listed in order — are: Real Estate, Rental & Leasing; Mining; Management of Companies & Support Services; Retail Trade; Arts, Entertainment & Recreation; Wholesale Trade; Accommodation & Food Services; Professional, Scientific & Technical Services; Health Care & Social Assistance; Information; Finance & Insurance; Agriculture, Forestry, Fishing & Hunting; Utilities; Construction; Transportation & Warehousing; and Public Administration. The only industry reporting contraction in March is Educational Services.
WHAT RESPONDENTS ARE SAYING …
- “Business is steady. Very concerned about high fuel costs and the speed of any Japanese recovery.” (Agriculture, Forestry, Fishing & Hunting)
- “Housing market still slow getting started. Freight costs going higher. Prices moving up.” (Wholesale Trade)
- “Business activities remain about the same, but the increase in fuel costs has made both a direct and indirect impact.” (Public Administration)
- “Occupancy continues to increase compared to last year by about 3 percent.” (Accommodation & Food Services)
- “The catastrophe in Japan is severely affecting supply chains for magnetic media.” (Management of Companies & Support Services)
- “General state of business has improved slightly over the prior month. There seems to be an increase in qualified customers.” (Construction)
COMMODITIES REPORTED UP / DOWN IN PRICE, and IN SHORT SUPPLY
Commodities Up in Price
Airfares (4); Aluminum Based Products; Coffee (2); Copper (2); Copper Products (4); Copper Tubing; Corn; Cotton (5); Cotton Products (7); Dairy (2); #1 Diesel Fuel (6); #2 Diesel Fuel (9); Food and Beverage (3); Fuel (15); Fuel Products; Fuel Surcharges (3); Gasoline (6); Ground Beef; #2 Heating Fuel; Janitorial Supplies (3); Latex Gloves (3); Medical Supplies; Packaging Materials; Paper (5); Petroleum Products (3); Plastic Pipe; Plastic Products; Plastic Resins; Polyester (2); Polyester Garments; Polyethylene Bags (4); Roofing Shingles; Steel (4); Steel Products (4); Trucks (2); Truck Freight; and Valves.
Commodities Down in Price
No commodities are reported down in price.
Commodities in Short Supply
Cotton (3); Electrical Components (2); Integrated Circuits; and Lettuce.
MARCH 2011 NON-MANUFACTURING INDEX SUMMARIES
NMI
In March, the NMI registered 57.3 percent, indicating continued growth in the non-manufacturing sector for the 16th 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 March registered 59.7 percent, a decrease of 7.2 percentage points when compared to the 66.9 percent registered in February. Fifteen industries reported increased business activity, and two industries reported decreased activity for the month of March. One industry reported no change from February. Comments from respondents include: “Capital projects moved from inactive to active” and “Award of long-awaited contracts.”
The industries reporting growth of business activity in March — listed in order — are: Real Estate, Rental & Leasing; Mining; Retail Trade; Arts, Entertainment & Recreation; Finance & Insurance; Health Care & Social Assistance; Accommodation & Food Services; Management of Companies & Support Services; Wholesale Trade; Utilities; Information; Construction; Professional, Scientific & Technical Services; Public Administration; and Educational Services. The industries reporting decreased business activity in March are: Other Services; and Transportation & Warehousing.
New Orders
ISM’s Non-Manufacturing New Orders Index grew in March for the 20th consecutive month. The index registered 64.1 percent, which is a decrease of 0.3 percentage point from the 64.4 percent reported in February. Comments from respondents include: “Outlook for 2011 and expectations are materializing” and “The turnaround is here.”
The 16 industries reporting growth of new orders in March — listed in order — are: Real Estate, Rental & Leasing; Management of Companies & Support Services; Mining; Utilities; Arts, Entertainment & Recreation; Wholesale Trade; Professional, Scientific & Technical Services; Information; Accommodation & Food Services; Finance & Insurance; Health Care & Social Assistance; Retail Trade; Educational Services; Construction; Transportation & Warehousing; and Public Administration. The only industry reporting contraction of new orders in March is Other Services.
Employment
Employment activity in the non-manufacturing sector grew in March, as ISM’s Non-Manufacturing Employment Index registered 53.7 percent. This reflects a decrease of 1.9 percentage points when compared to the 55.6 percent registered in February. Eleven industries reported increased employment, three industries reported decreased employment, and four industries reported unchanged employment compared to February. Comments from respondents include: “Continue to refill vacancies” and “Still under hiring freeze.”
The industries reporting an increase in employment in March — listed in order — are: Mining; Agriculture, Forestry, Fishing & Hunting; Retail Trade; Transportation & Warehousing; Arts, Entertainment & Recreation; Management of Companies & Support Services; Other Services; Public Administration; Wholesale Trade; Professional, Scientific & Technical Services; and Construction. The industries reporting a reduction in employment in March are: Educational Services; Finance & Insurance; and Health Care & Social Assistance.
Supplier Deliveries
The Supplier Deliveries Index registered 51.5 percent in March, 0.5 percentage point lower than the 52 percent registered in February, indicating that supplier deliveries continued to slow in March, but at a slightly slower rate. A reading above 50 percent indicates slower deliveries.
The five industries reporting slower deliveries in March are: Real Estate, Rental & Leasing; Wholesale Trade; Retail Trade; Other Services; and Professional, Scientific & Technical Services. The two industries reporting faster supplier deliveries in March are: Utilities; and Finance & Insurance. Eleven industries reported no change in supplier deliveries for the month of March compared to February.
Inventories
ISM’s Non-Manufacturing Inventories Index registered 55.5 percent in March, the same reading as reported in February. Of the total respondents in March, 31 percent indicated they do not have inventories or do not measure them. Comments from respondents include: “Planned investment in line with increasing sales” and “Stockpiling Japanese products due to anticipated loss in capacity.”
The nine industries reporting an increase in inventories in March — listed in order — are: Real Estate, Rental & Leasing; Utilities; Wholesale Trade; Transportation & Warehousing; Professional, Scientific & Technical Services; Management of Companies & Support Services; Finance & Insurance; Health Care & Social Assistance; and Retail Trade. The two industries reporting decreases in inventories in March are: Other Services and Public Administration.
Prices
Prices paid by non-manufacturing organizations for purchased materials and services increased in March. ISM’s Non-Manufacturing Prices Index for March registered 72.1 percent, 1.2 percentage points lower than the 73.3 percent reported in February. In March, the percentage of respondents reporting higher prices is 51 percent, the percentage indicating no change in prices paid is 47 percent, and 2 percent of the respondents reported lower prices.
In March, all 18 industries reported an increase in prices paid, in the following order: Real Estate, Rental & Leasing; Construction; Accommodation & Food Services; Utilities; Arts, Entertainment & Recreation; Wholesale Trade; Mining; Management of Companies & Support Services; Agriculture, Forestry, Fishing & Hunting; Retail Trade; Public Administration; Finance & Insurance; Other Services; Information; Educational Services; Professional, Scientific & Technical Services; Health Care & Social Assistance; and Transportation & Warehousing.
Backlog of Orders
ISM’s Non-Manufacturing Backlog of Orders Index grew in March for the third consecutive month. The index registered 56 percent, 4 percentage points higher than the 52 percent reported in February. Of the total respondents in March, 45 percent indicated they do not measure backlog of orders.
The eight industries reporting an increase in order backlogs in March — listed in order — are: Management of Companies & Support Services; Mining; Real Estate, Rental & Leasing; Construction; Retail Trade; Wholesale Trade; Finance & Insurance; and Professional, Scientific & Technical Services. The three industries reporting lower backlog of orders in March are: Utilities; Other Services; and Public Administration.
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 faster rate in March. The New Export Orders Index for March registered 59 percent, which is 2.5 percentage points higher than the 56.5 percent registered in February. Of the total respondents in March, 66 percent indicated they either do not perform, or do not separately measure, orders for work outside of the United States.
The nine industries reporting an increase in new export orders in March — listed in order — are: Construction; Management of Companies & Support Services; Arts, Entertainment & Recreation; Mining; Transportation & Warehousing; Accommodation & Food Services; Retail Trade; Finance & Insurance; and Professional, Scientific & Technical Services. The only industry reporting a decrease in export orders in March is Other Services. Six industries reported no change in new export orders for the month of March compared to February.
Imports
The ISM Non-Manufacturing Imports Index registered 50 percent in March, indicating the rate is unchanged compared to February. Sixty-one percent of respondents reported that they do not use, or do not track, the use of imported materials.
The four industries reporting an increase in the use of imports in March are: Professional, Scientific & Technical Services; Management of Companies & Support Services; Accommodation & Food Services; and Other Services. The two industries reporting a decrease in imports for the month of March are: Educational Services and Wholesale Trade. Eleven industries reported no change in imports for the month of March compared to February.
Inventory Sentiment
The ISM Non-Manufacturing Inventory Sentiment Index in March registered 67 percent, which is 9.5 percentage points higher than the 57.5 percent reported in February. This indicates that respondents believe their inventories are too high at this time. In March, 37 percent of respondents said their inventories were too high, 3 percent said their inventories were too low, and 60 percent said their inventories were about right.
The nine industries reporting a feeling that their inventories are too high in March — listed in order — are: Wholesale Trade; Professional, Scientific & Technical Services; Construction; Management of Companies & Support Services; Accommodation & Food Services; Utilities; Finance & Insurance; Arts, Entertainment & Recreation; and Public Administration. The two industries reporting that inventories are too low in March are: Other Services and Retail Trade.
