INDUSTRY PERFORMANCE (Based on the NMI)
The 15 non-manufacturing industries reporting growth in June based on the NMI composite index — listed in order — are: Real Estate, Rental & Leasing; Transportation & Warehousing; Wholesale Trade; Professional, Scientific & Technical Services; Mining; Construction; Other Services; Educational Services; Arts, Entertainment & Recreation; Public Administration; Management of Companies & Support Services; Accommodation & Food Services; Information; Utilities; and Retail Trade. The two industries reporting contraction in June are: Finance & Insurance; and Health Care & Social Assistance.
WHAT RESPONDENTS ARE SAYING …
- “Business is still up, although some softening seen over last month.” (Wholesale Trade)
- “Orders are remaining steady, and outlook for this year is positive.” (Professional, Scientific & Technical Services)
- “Economic activity continues to be sluggish.” (Management of Companies & Support Services)
- “Have yet to see a real spark that ignites new and invigorated business — still seems lethargic and mired in recession-related preventative moves, and no one sees a real improvement ahead.” (Public Administration)
- “Commodities coming down in price, which should help stabilize inflation.” (Retail Trade)
COMMODITIES REPORTED UP / DOWN IN PRICE, and IN SHORT SUPPLY
Commodities Up in Price
Airfares (7); Can Liners (3); Cheese; Chemicals (2); Copy Paper; Cotton Products (10); #1 Diesel Fuel(c) (9); #2 Diesel Fuel(c) (12); Food & Beverage; Food Products (2); Fuel (18); Fuel Surcharges (6); Gasoline(c) (9); Gloves; Latex Gloves (6); Paper (8); Petroleum Products (6); Plastic Products (4); Plastics (3); and Polyethylene Film.
Commodities Down in Price
Cotton; #1 Diesel Fuel(c); #2 Diesel Fuel(c); and Gasoline(c).
Commodities in Short Supply
Fiber Optic Products; Medical Supplies; Plastic Products; Plenum Cable; and Tires.
Note: The number of consecutive months the commodity is listed is indicated after each item.
JUNE 2011 NON-MANUFACTURING INDEX SUMMARIES
NMI
In June, the NMI registered 53.3 percent, indicating continued growth in the non-manufacturing sector for the 19th 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 June registered 53.4 percent, a decrease of 0.2 percentage point when compared to the 53.6 percent registered in May. Ten industries reported increased business activity, and five industries reported decreased activity for the month of June. Comments from respondents include: “More consumer sales” and “Planned capital expenditures.”
The industries reporting growth of business activity in June — listed in order — are: Transportation & Warehousing; Arts, Entertainment & Recreation; Educational Services; Other Services; Public Administration; Wholesale Trade; Construction; Professional, Scientific & Technical Services; Management of Companies & Support Services; and Information. The five industries reporting decreased business activity in June are: Mining; Retail Trade; Health Care & Social Assistance; Finance & Insurance; and Accommodation & Food Services.
New Orders
ISM’s Non-Manufacturing New Orders Index grew in June for the 23rd consecutive month. The index registered 53.6 percent, a decrease of 3.2 percentage points from the 56.8 percent reported in May. Comments from respondents include: “Higher level of spending due to more budgets approved for this fiscal year” and “Increase in national accounts business.”
The 11 industries reporting growth of new orders in June — listed in order — are: Real Estate, Rental & Leasing; Transportation & Warehousing; Educational Services; Arts, Entertainment & Recreation; Wholesale Trade; Accommodation & Food Services; Professional, Scientific & Technical Services; Mining; Other Services; Public Administration; and Management of Companies & Support Services. The four industries reporting contraction of new orders in June are: Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Retail Trade; and Health Care & Social Assistance.
Employment
Employment activity in the non-manufacturing sector grew in June, as ISM’s Non-Manufacturing Employment Index registered 54.1 percent. This reflects an increase of 0.1 percentage point when compared to the 54 percent registered in May. Fourteen industries reported increased employment, three industries reported decreased employment, and one industry reported unchanged employment compared to May. Comments from respondents include: “Continuing to fill backlog of positions” and “Hiring to get back to required staffing levels.”
The industries reporting an increase in employment in June — listed in order — are: Real Estate, Rental & Leasing; Mining; Agriculture, Forestry, Fishing & Hunting; Management of Companies & Support Services; Public Administration; Construction; Professional, Scientific & Technical Services; Accommodation & Food Services; Retail Trade; Transportation & Warehousing; Wholesale Trade; Information; Finance & Insurance; and Other Services. The industries reporting a reduction in employment in June are: Educational Services; Health Care & Social Assistance; and Arts, Entertainment & Recreation.
Supplier Deliveries
The Supplier Deliveries Index registered 52 percent in June, 2 percentage points lower than the 54 percent registered in May, indicating that supplier deliveries continued to slow in June. A reading above 50 percent indicates slower deliveries.
The seven industries reporting slower deliveries in June — listed in order — are: Retail Trade; Construction; Wholesale Trade; Utilities; Educational Services; Other Services; and Professional, Scientific & Technical Services. The three industries reporting faster supplier deliveries in June are: Finance & Insurance; Health Care & Social Assistance; and Transportation & Warehousing. Eight industries reported no change in supplier deliveries for the month of June compared to May.
Inventories
ISM’s Non-Manufacturing Inventories Index registered 53.5 percent in June, 1.5 percentage points lower than the 55 percent reading that was reported in May. Of the total respondents in June, 29 percent indicated they do not have inventories or do not measure them. Comments from respondents include: “Working down inventory to desired level” and “Reducing non-performing inventory.”
The nine industries reporting an increase in inventories in June — listed in order — are: Real Estate, Rental & Leasing; Utilities; Wholesale Trade; Transportation & Warehousing; Management of Companies & Support Services; Accommodation & Food Services; Arts, Entertainment & Recreation; Mining; and Information. The seven industries reporting decreases in inventories in June — listed in order — are: Other Services; Professional, Scientific & Technical Services; Finance & Insurance; Construction; Public Administration; Retail Trade; and Health Care & Social Assistance.
Prices
Prices paid by non-manufacturing organizations for purchased materials and services increased in June. ISM’s Non-Manufacturing Prices Index for June registered 60.9 percent, 8.7 percentage points lower than the 69.6 percent reported in May. In June, the percentage of respondents reporting higher prices is 35 percent, the percentage indicating no change in prices paid is 58 percent, and 7 percent of the respondents reported lower prices.
Sixteen non-manufacturing industries reported an increase in prices paid, in the following order: Real Estate, Rental & Leasing; Accommodation & Food Services; Arts, Entertainment & Recreation; Mining; Wholesale Trade; Professional, Scientific & Technical Services; Management of Companies & Support Services; Transportation & Warehousing; Health Care & Social Assistance; Finance & Insurance; Utilities; Educational Services; Other Services; Retail Trade; Construction; and Public Administration. The only industry reporting a decrease in prices paid is Information.
Backlog of Orders
ISM’s Non-Manufacturing Backlog of Orders Index contracted in June after five consecutive months of growth. The index registered 48.5 percent, 6.5 percentage points lower than the 55 percent reported in May. Of the total respondents in June, 43 percent indicated they do not measure backlog of orders.
The five industries reporting an increase in order backlogs in June are: Construction; Retail Trade; Other Services; Health Care & Social Assistance; and Wholesale Trade. The five industries reporting lower backlog of orders in June are: Utilities; Information; Professional, Scientific & Technical Services; Mining; and Finance & Insurance. Eight industries reported no change in order backlogs for the month of June compared to May.
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 in June. The New Export Orders Index for June registered 57 percent, which is the same as registered in May and is the 10th consecutive month of growth in the index. Of the total respondents in June, 69 percent indicated they either do not perform, or do not separately measure, orders for work outside of the United States.
The seven industries reporting an increase in new export orders in June — listed in order — are: Arts, Entertainment & Recreation; Construction; Other Services; Transportation & Warehousing; Finance & Insurance; Professional, Scientific & Technical Services; and Wholesale Trade. The two industries reporting a decrease in export orders in June are: Information and Retail Trade. Six industries reported no change in new export orders for the month of June compared to May.
Imports
The ISM Non-Manufacturing Imports Index contracted in June after 10 consecutive months of growth. The index registered 46.5 percent, which is 4 percentage points lower than the 50.5 percent reported in May. Sixty-five 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: Transportation & Warehousing; Arts, Entertainment & Recreation; and Other Services. The four industries reporting a decrease in imports for the month of June are: Information; Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; and Retail Trade. Eight industries reported no change in imports for the month of June compared to May.
Inventory Sentiment
The ISM Non-Manufacturing Inventory Sentiment Index in June registered 58.5 percent, which is 3.5 percentage points higher than the 55 percent reported in May. This indicates that respondents believe their inventories are still too high at this time. In June, 24 percent of respondents said their inventories were too high, 7 percent said their inventories were too low, and 69 percent said their inventories were about right.
The six industries reporting a feeling that their inventories are too high in June — listed in order — are: Management of Companies & Support Services; Information; Finance & Insurance; Other Services; Wholesale Trade; and Accommodation & Food Services. The only industry reporting that inventories are too low in June is Public Administration. Ten industries reported no change in inventory sentiment in June compared to May.
