Sections: Economy

ISM ROB: Service Sector Growth Slows in August (Chart)

(PHOTO: REUTERS)

The Institute for Supply Management said it’s Non-Manufacturing Report on Business (ROB) index showed services sector growth cooled in August. The ISM said its services index fell to 59 last month from 60.3 in July, which was its highest since August 2005. Analysts were looking for a reading of 58.1 in August, according to a Reuters survey. A reading above 50 indicates expansion in the sector.

“This represents continued growth in the non-manufacturing sector at a slower rate,” said Anthony Nieves, chair of the Institute for Supply Management. “The Non-Manufacturing Business Activity Index decreased to 63.9 percent, which is 1 percentage point lower than the July reading of 64.9 percent, reflecting growth for the 73rd consecutive month at a slower rate.”

The ISM’s index of business activity fell to 63.9 last month from July’s reading of 64.9, while economists were looking for a reading of 61. The new orders index fell to 63.4 from 63.8, while the employment index dropped to 56 from 59.6. The index on prices slipped to 50.8 from 53.7.

The 15 non-manufacturing industries reporting growth in August — listed in order — are: Transportation & Warehousing; Real Estate, Rental & Leasing; Construction; Accommodation & Food Services; Retail Trade; Finance & Insurance; Public Administration; Health Care & Social Assistance; Educational Services; Utilities; Management of Companies & Support Services; Wholesale Trade; Arts, Entertainment & Recreation; Professional, Scientific & Technical Services; and Information. The only industry reporting contraction in August is Mining.

ISM^® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM^® NON-MANUFACTURING AND ISM^® MANUFACTURING SURVEYS* AUGUST 2015
	Non-Manufacturing						Manufacturing
Index	Series Index Aug	Series Index Jul	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index Aug	Series Index Jul	Percent Point Change
NMI^®/PMI^®	59.0	60.3	-1.3	Growing	Slower	67	51.1	52.7	-1.6
Business Activity/Production	63.9	64.9	-1.0	Growing	Slower	73	53.6	56.0	-2.4
New Orders	63.4	63.8	-0.4	Growing	Slower	73	51.7	56.5	-4.8
Employment	56.0	59.6	-3.6	Growing	Slower	18	51.2	52.7	-1.5
Supplier Deliveries	52.5	53.0	-0.5	Slowing	Slower	3	50.7	48.9	+1.8
Inventories	54.5	57.0	-2.5	Growing	Slower	5	48.5	49.5	-1.0
Prices	50.8	53.7	-2.9	Increasing	Slower	6	39.0	44.0	-5.0
Backlog of Orders	56.5	54.0	+2.5	Growing	Faster	3	46.5	42.5	+4.0
New Export Orders	52.0	56.5	-4.5	Growing	Slower	4	46.5	48.0	-1.5
Imports	51.5	50.5	+1.0	Growing	Faster	2	51.5	52.0	-0.5
Inventory Sentiment	69.0	63.5	+5.5	Too High	Faster	219	N/A	N/A	N/A
Customers’ Inventories	N/A	N/A	N/A	N/A	N/A	N/A	53.0	44.0	+9.0
Overall Economy				Growing	Slower	73
Non-Manufacturing Sector				Growing	Slower	67

* Non-Manufacturing ISM^® Report On Business^® data is seasonally adjusted for Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM^® Report On Business^® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.

** Number of months moving in current direction.

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PPD Business Staff

PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.