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Wednesday, July 17, 2019
HomeNewsEconomyISM Report on Business (NMI): Service Sector Growth Outpaces Expectations

ISM Report on Business (NMI): Service Sector Growth Outpaces Expectations

service-sector-cubicle-reuters
service-sector-cubicle-reuters

(Photo: Reuters)

The Institute for Supply Management’s non-manufacturing index (NMI) rose to 59.1 in October from 56.9 in September, beating economists’ expectations. Economists surveyed by The Wall Street Journal had forecast the ISM Non-Manufacturing Report on Business index to decline to 56.8.

INDUSTRY PERFORMANCE

The 14 non-manufacturing industries reporting growth in October — listed in order — are: Transportation & Warehousing; Health Care & Social Assistance; Professional, Scientific & Technical Services; Utilities; Retail Trade; Construction; Management of Companies & Support Services; Information; Finance & Insurance; Other Services; Arts, Entertainment & Recreation; Public Administration; Wholesale Trade; and Accommodation & Food Services. The only industry reporting contraction in October is Mining.

The report said survey respondents “remain mostly positive about business conditions and the overall economy,” but the historically lower-paying service sector outpacing manufacturing and other higher-paying sectors has become a concerning trend.

The NMI is a barometer for the nation’s restaurants, builders, bankers and other service providers. While many are lopsided toward lower wages, consumer spending is the primary driver of the economic expansion in the U.S. and a full two-thirds of those outlays are on the service sector.

ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE
COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS*
OCTOBER 2015
Non-Manufacturing Manufacturing
Index Series
Index
Oct
Series
Index
Sep
Percent
Point
Change
Direction Rate
of
Change
Trend**
(Months)
Series
Index
Oct
Series
Index
Sep
Percent
Point
Change
NMI®/PMI® 59.1 56.9 +2.2 Growing Faster 69 50.1 50.2 -0.1
Business Activity/Production 63.0 60.2 +2.8 Growing Faster 75 52.9 51.8 +1.1
New Orders 62.0 56.7 +5.3 Growing Faster 75 52.9 50.1 +2.8
Employment 59.2 58.3 +0.9 Growing Faster 20 47.6 50.5 -2.9
Supplier Deliveries 52.0 52.5 -0.5 Slowing Slower 5 50.4 50.2 +0.2
Inventories 52.5 51.0 +1.5 Growing Faster 7 46.5 48.5 -2.0
Prices 49.1 48.4 +0.7 Decreasing Slower 2 39.0 38.0 +1.0
Backlog of Orders 54.5 54.5 0.0 Growing Same 5 42.5 41.5 +1.0
New Export Orders 54.5 52.5 +2.0 Growing Faster 6 47.5 46.5 +1.0
Imports 54.5 53.0 +1.5 Growing Faster 4 47.0 50.5 -3.5
Inventory Sentiment 63.0 65.0 -2.0 Too High Slower 221 N/A N/A N/A
Customers’ Inventories N/A N/A N/A N/A N/A N/A 51.0 54.5 -3.5
Overall Economy Growing Faster 75
Non-Manufacturing Sector Growing Faster 69

* 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.

Written by
Staff Writing Group

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.

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