INDUSTRY PERFORMANCE (Based on the NMI)
The 13 non-manufacturing industries reporting growth in July based on the NMI composite index — listed in order — are: Transportation & Warehousing; Mining; Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Accommodation & Food Services; Agriculture, Forestry, Fishing & Hunting; Retail Trade; Public Administration; Educational Services; Information; Finance & Insurance; Other Services; and Wholesale Trade. The five industries reporting contraction in July are: Professional, Scientific & Technical Services; Management of Companies & Support Services; Health Care & Social Assistance; Utilities; and Construction.
WHAT RESPONDENTS ARE SAYING …
- “Sales and customer traffic recovered slightly, pulling even with last year after trending lower for several months. Discretionary spending per customer has continued to decline in all areas of the operation.” (Arts, Entertainment & Recreation)
- “Sales volumes are steady. Input costs are increasing.” (Agriculture, Forestry, Fishing & Hunting)
- “Business outlook remains steady, but concerns about the second half of the year remain.” (Professional, Scientific & Technical Services)
- “Municipal government has not bounced back at a similar pace to the private sector.” (Public Administration)
- “New home construction is still very slow. Repair and remodel is the only bright spot.” (Wholesale Trade)
- “Commodities cooling off and dropping a bit.” (Retail Trade)
COMMODITIES REPORTED UP / DOWN IN PRICE, and IN SHORT SUPPLY
Commodities Up in Price
Airfares (8); Asphalt Products; Beef; Can Liners (4); Cardboard; Cheese (2); Construction Labor; Copy Paper (2); Cotton Products (11); Dairy; #2 Diesel Fuel (13); Fuel (19); Gasoline(c) (10); Janitorial Maintenance Supplies; Lumber; Maintenance Contracts; Office and Computer Supplies; Packaging; Paper (9); Paper Products; Petroleum Products (7); Plastic Bags; Plastic Products (5); and Roofing Shingles.
Commodities Down in Price
Chicken; Computers and Computer Supplies; Diesel Fuel; Gasoline(c) (2); and Natural Gas.
Commodities in Short Supply
Trucks is the only commodity reported in short supply.
JULY 2011 NON-MANUFACTURING INDEX SUMMARIES
NMI
In July, the NMI registered 52.7 percent, indicating continued growth in the non-manufacturing sector for the 20th consecutive month. This month’s index is the lowest reading since January 2010, when the index registered 50.7 percent. 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 July registered 56.1 percent, an increase of 2.7 percentage points when compared to the 53.4 percent registered in June. Twelve industries reported increased business activity, and five industries reported decreased activity for the month of July. Comments from respondents include: “Slightly higher due to increased marketing efforts” and “Increased sales — existing businesses.”
The industries reporting growth of business activity in July — listed in order — are: Transportation & Warehousing; Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Accommodation & Food Services; Mining; Retail Trade; Educational Services; Information; Finance & Insurance; Public Administration; Health Care & Social Assistance; and Wholesale Trade. The five industries reporting decreased business activity in July are: Agriculture, Forestry, Fishing & Hunting; Professional, Scientific & Technical Services; Utilities; Management of Companies & Support Services; and Construction.
New Orders
ISM’s Non-Manufacturing New Orders Index grew in July for the 24th consecutive month. The index registered 51.7 percent, a decrease of 1.9 percentage points from the 53.6 percent reported in June. Comments from respondents include: “Lower demand or budget constraints” and “Uncertainty of funding.”
The 10 industries reporting growth of new orders in July — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Transportation & Warehousing; Mining; Arts, Entertainment & Recreation; Retail Trade; Educational Services; Public Administration; Accommodation & Food Services; Construction; and Finance & Insurance. The four industries reporting contraction of new orders in July are: Professional, Scientific & Technical Services; Health Care & Social Assistance; Utilities; and Management of Companies & Support Services.
Employment
Employment activity in the non-manufacturing sector grew in July, as ISM’s Non-Manufacturing Employment Index registered 52.5 percent. This reflects a decrease of 1.6 percentage points when compared to the 54.1 percent registered in June. Nine industries reported increased employment, one industry reported decreased employment, and eight industries reported unchanged employment compared to June. Comments from respondents include “Filling some vacancies on a case-by-case basis” and “Slightly lower due to end of assignments/jobs.”
The industries reporting an increase in employment in July — listed in order — are: Real Estate, Rental & Leasing; Mining; Agriculture, Forestry, Fishing & Hunting; Transportation & Warehousing; Wholesale Trade; Retail Trade; Finance & Insurance; Public Administration; and Accommodation & Food Services. The only industry reporting a reduction in employment in July is Professional, Scientific & Technical Services.
Supplier Deliveries
The Supplier Deliveries Index registered 50.5 percent in July, 1.5 percentage points lower than the 52 percent registered in June, indicating that supplier deliveries continued to slow in July. A reading above 50 percent indicates slower deliveries.
The nine industries reporting slower deliveries in July — listed in order — are: Utilities; Arts, Entertainment & Recreation; Other Services; Transportation & Warehousing; Information; Accommodation & Food Services; Public Administration; Construction; and Retail Trade. The four industries reporting faster supplier deliveries in July are: Wholesale Trade; Professional, Scientific & Technical Services; Health Care & Social Assistance; and Finance & Insurance.
Inventories
ISM’s Non-Manufacturing Inventories Index registered 56.5 percent in July, 3 percentage points higher than the 53.5 percent reading that was reported in June. Of the total respondents in July, 31 percent indicated they do not have inventories or do not measure them. Comments from respondents include: “Improved inventory management oversight” and “Continue to fill in gaps and increase in line with run rates.”
The seven industries reporting an increase in inventories in July — listed in order — are: Mining; Utilities; Transportation & Warehousing; Information; Wholesale Trade; Accommodation & Food Services; and Public Administration. The five industries reporting decreases in inventories in July are: Management of Companies & Support Services; Construction; Finance & Insurance; Health Care & Social Assistance; and Retail Trade.
Prices
Prices paid by non-manufacturing organizations for purchased materials and services increased in July. ISM’s Non-Manufacturing Prices Index for July registered 56.6 percent, 4.3 percentage points lower than the 60.9 percent reported in June. In July, the percentage of respondents reporting higher prices is 30 percent, the percentage indicating no change in prices paid is 61 percent, and 9 percent of the respondents reported lower prices.
Sixteen non-manufacturing industries reported an increase in prices paid, in the following order: Agriculture, Forestry, Fishing & Hunting; Arts, Entertainment & Recreation; Accommodation & Food Services; Retail Trade; Transportation & Warehousing; Real Estate, Rental & Leasing; Wholesale Trade; Educational Services; Utilities; Management of Companies & Support Services; Other Services; Health Care & Social Assistance; Mining; Finance & Insurance; Professional, Scientific & Technical Services; and Information. The two industries reporting a decrease in prices paid are: Construction and Public Administration.
Backlog of Orders
ISM’s Non-Manufacturing Backlog of Orders Index contracted in July for the second consecutive month. The index registered 44 percent, 4.5 percentage points lower than the 48.5 percent reported in June. Of the total respondents in July, 45 percent indicated they do not measure backlog of orders.
The two industries reporting an increase in order backlogs in July are: Accommodation & Food Services; and Mining. The seven industries reporting lower backlog of orders in July — listed in order — are: Utilities; Public Administration; Other Services; Information; Retail Trade; Professional, Scientific & Technical Services; and Wholesale Trade. Eight industries reported no change in order backlogs for the month of July compared to June.
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 July after 10 consecutive months of growth. The New Export Orders Index for July registered 49 percent, which is 8 percentage points lower than the 57 percent reported in June. Of the total respondents in July, 66 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 July are: Construction; Transportation & Warehousing; Public Administration; and Accommodation & Food Services. The five industries reporting a decrease in export orders in July are: Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; Other Services; Professional, Scientific & Technical Services; and Information. Six industries reported no change in new export orders for the month of July compared to June.
Imports
The ISM Non-Manufacturing Imports Index contracted in July for the second consecutive month after 10 consecutive months of growth. The index registered 47.5 percent, which is 1 percentage point higher than the 46.5 percent reported in June. Fifty-nine 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 July are: Transportation & Warehousing; Information; Retail Trade; Mining; and Accommodation & Food Services. The six industries reporting a decrease in imports for the month of July — listed in order — are: Other Services; Finance & Insurance; Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; Management of Companies & Support Services; and Arts, Entertainment & Recreation. Five industries reported no change in imports for the month of July compared to June.
Inventory Sentiment
The ISM Non-Manufacturing Inventory Sentiment Index in July registered 59.5 percent, which is 1 percentage point higher than the 58.5 percent reported in June. This indicates that respondents believe their inventories are still too high at this time. In July, 27 percent of respondents said their inventories were too high, 8 percent said their inventories were too low, and 65 percent said their inventories were about right.
The seven industries reporting a feeling that their inventories are too high in July — listed in order — are: Other Services; Management of Companies & Support Services; Finance & Insurance; Arts, Entertainment & Recreation; Accommodation & Food Services; Wholesale Trade; and Information. The two industries reporting that inventories are too low in July are: Professional, Scientific & Technical Services; and Real Estate, Rental & Leasing. Eight industries reported no change in inventory sentiment in July compared to June.
