Service Sector Index (NMI) Beats Consensus Forecast at 55.5
The Institute for Supply Management (ISM) Non-Manufacturing Index (NMI) indicates the U.S. service sector grew at a faster pace in January. The NMI came in at 55.5%, an increase of 0.6 from the seasonally adjusted reading of 54.9% in December.
Forecasts ranged from a low of 53.5 to a high of 56.0. The consensus forecast was 55.2.
“The non-manufacturing sector exhibited continued growth in January,” Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee, said. “The respondents remain mostly positive about business conditions and the overall economy. Respondents continue to have difficulty with labor resources.”
The 12 non-manufacturing industries reporting growth in January — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Management of Companies & Support Services; Health Care & Social Assistance; Educational Services; Utilities; Accommodation & Food Services; Finance & Insurance; Retail Trade; Construction; Public Administration; Information; and Professional, Scientific & Technical Services.
The six industries reporting a decrease in January — listed in order — are: Transportation & Warehousing; Wholesale Trade; Other Services; Arts, Entertainment & Recreation; Mining; and Real Estate, Rental & Leasing.
WHAT RESPONDENTS ARE SAYING
- “Outlook remains favorable for growth in 2020. Pricing on goods and services [are] stable, with little to no pricing escalations expected for the remainder of the first quarter, except for seasonal- and trade/tariff-related impacts on food products.” (Accommodation & Food Services)
- “Q1 sales are improving, which makes us more optimistic.” (Construction)
- “Cautious start to 2020. Looking forward with optimism and encouragement. Conditions are favorable.” (Finance & Insurance)
- “Closely monitoring China’s coronavirus and its potential impact on medical supplies like surgical masks and protective goggles.” (Health Care & Social Assistance)
- “The labor market continues to be a challenge, impacting capacity and pushing up costs. Despite this, overall business volume remains positive, with growth in key sectors for our business.” (Management of Companies & Support Services)
- “The oil and gas industry is off to a slow start in 2020, as oil prices dropped slightly to start the year. Companies continue to be highly disciplined about hiring direct employees or contractors and making capital investments that drive hiring. Several notable oil and gas companies announced layoffs in the first week of January 2020.” (Professional, Scientific & Technical Services)
- “Customer inquiries are strong to start the new year.” (Real Estate, Rental & Leasing)
- “Activity is fair overall, but with regional ups and downs. The West in general has been favorable due to snowfall increasing sales activity, while the East has been down due to warmer weather in key winter tire markets. Optimism for the month, however, is good.” (Wholesale Trade)