Service sector employee, nurse at a hospital. (Photo: REUTERS)
The Non-Manufacturing Report on Business (NMI), a gauge of U.S. service sector activity by the Institute for Supply Management, expanded slowly in May. However, the NMI continued to show growth and 14 non-manufacturing industries show signs of resilience in a weakening U.S. economy. Non-manufacturing activity on the NMI fell to 52.9 in May, down 2.8% from 55.7 in April. Economists surveyed by The Wall Street Journal expected a smaller tick down to 55.5. A reading above 50 indicates that services activity is expanding, while a reading below 50 signals contraction. May marked the 76th month of expansion in the service sector of the economy, which covers everything from banking to burger chains.
| ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS* MAY 2016 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Non-Manufacturing | Manufacturing | ||||||||
| Index | Series Index May | Series Index Apr | Percent Point Change | Direction | Rate of Change | Trend** (Months) | Series Index May | Series Index Apr | Percent Point Change |
| NMI®/PMI® | 52.9 | 55.7 | -2.8 | Growing | Slower | 76 | 51.3 | 50.8 | +0.5 |
| Business Activity/Production | 55.1 | 58.8 | -3.7 | Growing | Slower | 82 | 52.6 | 54.2 | -1.6 |
| New Orders | 54.2 | 59.9 | -5.7 | Growing | Slower | 82 | 55.7 | 55.8 | -0.1 |
| Employment | 49.7 | 53.0 | -3.3 | Contracting | From Growing | 1 | 49.2 | 49.2 | 0.0 |
| Supplier Deliveries | 52.5 | 51.0 | +1.5 | Slowing | Faster | 5 | 54.1 | 49.1 | +5.0 |
| Inventories | 54.0 | 54.0 | 0.0 | Growing | Same | 14 | 45.0 | 45.5 | -0.5 |
| Prices | 55.6 | 53.4 | +2.2 | Increasing | Faster | 2 | 63.5 | 59.0 | +4.5 |
| Backlog of Orders | 50.0 | 51.5 | -1.5 | Unchanged | From Growing | 1 | 47.0 | 50.5 | -3.5 |
| New Export Orders | 49.0 | 56.5 | -7.5 | Contracting | From Growing | 1 | 52.5 | 52.5 | 0.0 |
| Imports | 53.5 | 54.0 | -0.5 | Growing | Slower | 4 | 50.0 | 50.0 | 0.0 |
| Inventory Sentiment | 60.0 | 61.0 | -1.0 | Too High | Slower | 228 | N/A | N/A | N/A |
| Customers’ Inventories | N/A | N/A | N/A | N/A | N/A | N/A | 50.0 | 46.0 | +4.0 |
| Overall Economy | Growing | Slower | 82 | ||||||
| Non-Manufacturing Sector | Growing | Slower | 76 | ||||||
* 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. The 14 non-manufacturing industries reporting growth in May — listed in order — are: Health Care & Social Assistance; Accommodation & Food Services; Utilities; Wholesale Trade; Agriculture, Forestry, Fishing & Hunting; Construction; Public Administration; Real Estate, Rental & Leasing; Management of Companies & Support Services; Information; Finance & Insurance; Retail Trade; Transportation & Warehousing; and Arts, Entertainment & Recreation. The four industries reporting contraction in May are: Mining; Other Services; Educational Services; and Professional, Scientific & Technical Services.
