Service sector employee, nurse at a hospital. (Photo: REUTERS)
U.S. service-sector activity increased more than expected in June. The Institute for Supply Management (ISM) Non-Manufacturing Report on Business purchasing managers index rose to 56.5 in June from 52.9 in May, the highest reading since November.
The median economic forecast called for the index to increase to 53.6. Key components of the index also gained ground. New orders registered at 59.9, up from 54.2 in May. Employment grew to 52.7 from May’s 49.7. The ISM doesn’t disclose the date its survey closes, so it isn’t clear if the latest report fully captures uncertainty in global markets generated by the United Kingdom’s vote to leave the European Union.
A separate ISM survey released Friday showed that almost one-third of service-industry businesses thought their firm would be negatively or slightly negatively affected by the Brexit.
SERVICE SECTOR INDUSTRY PERFORMANCE
The 15 non-manufacturing industries reporting growth in June — listed in order — are: Mining; Arts, Entertainment & Recreation; Management of Companies & Support Services; Retail Trade; Health Care & Social Assistance; Utilities; Real Estate, Rental & Leasing; Accommodation & Food Services; Transportation & Warehousing; Wholesale Trade; Information; Public Administration; Agriculture, Forestry, Fishing & Hunting; Construction; and Finance & Insurance. The three industries reporting contraction in June are: Educational Services; Professional, Scientific & Technical Services; and Other Services.
| ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS* JUNE 2016 |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
| Non-Manufacturing | Manufacturing | ||||||||
| Index | Series Index Jun |
Series Index May |
Percent Point Change |
Direction | Rate of Change |
Trend** (Months) |
Series Index Jun |
Series Index May |
Percent Point Change |
| NMI®/PMI® | 56.5 | 52.9 | +3.6 | Growing | Faster | 77 | 53.2 | 51.3 | +1.9 |
| Business Activity/Production | 59.5 | 55.1 | +4.4 | Growing | Faster | 83 | 54.7 | 52.6 | +2.1 |
| New Orders | 59.9 | 54.2 | +5.7 | Growing | Faster | 83 | 57.0 | 55.7 | +1.3 |
| Employment | 52.7 | 49.7 | +3.0 | Growing | From Contracting | 1 | 50.4 | 49.2 | +1.2 |
| Supplier Deliveries | 54.0 | 52.5 | +1.5 | Slowing | Faster | 6 | 55.4 | 54.1 | +1.3 |
| Inventories | 55.5 | 54.0 | +1.5 | Growing | Faster | 15 | 48.5 | 45.0 | +3.5 |
| Prices | 55.5 | 55.6 | -0.1 | Increasing | Slower | 3 | 60.5 | 63.5 | -3.0 |
| Backlog of Orders | 47.5 | 50.0 | -2.5 | Contracting | From Growing | 1 | 52.5 | 47.0 | +5.5 |
| New Export Orders | 53.0 | 49.0 | +4.0 | Growing | From Contracting | 1 | 53.5 | 52.5 | +1.0 |
| Imports | 54.0 | 53.5 | +0.5 | Growing | Faster | 5 | 52.0 | 50.0 | +2.0 |
| Inventory Sentiment | 62.5 | 60.0 | +2.5 | Too High | Faster | 229 | N/A | N/A | N/A |
| Customers’ Inventories | N/A | N/A | N/A | N/A | N/A | N/A | 51.0 | 50.0 | +1.0 |
| Overall Economy | Growing | Faster | 83 | ||||||
| Non-Manufacturing Sector | Growing | Faster | 77 | ||||||
* 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.
