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ISM Non-Manufacturing Index (NMI) Ticks Higher to 58.1 in July, Beating Forecast

Service Sector Post Strong Recovery Reading for Second Straight Month

United States Postal Service (USPS) workers don face masks and gloves behind plexiglass at the USPS location on N. Main in Gainesville, Fla., during the coronavirus (COVID-19) pandemic. (Photo: People’s Pundit Daily/PPD)

Tempe, Arizona (PPD) — The Institute for Supply Management (ISM) Non-Manufacturing Index (NMI) rose to 58.1% in July, stronger than economists expected. The reading indicates U.S. service sector expanded for the second month after two months in contraction.

Forecasts ranged from a low of 53.5 to a high of 57.5. The consensus forecast was 55.0. In June, the NMI posted the largest single-month percentage-point gain since the NMI debut in 1997, and now in July is at the highest level since February 2019.

“Respondents remain concerned about the pandemic; however, they are mostly optimistic about business conditions and the economy as businesses continue to reopen,” Anthony Nieves, Chair of the ISM Services Business Survey Committee. “Sentiment varies across industries, as they are impacted differently.”

 Services NMIManufacturing PMI
IndexSeries Index JulSeries Index JunPercent Point ChangeDirectionRate of ChangeTrend** (Months)Series Index JulSeries Index JunPercent Point Change
Services PMI58.157.1+1.0GrowingFaster254.252.6+1.6
Business Activity/ Production67.266.0+1.2GrowingFaster262.157.3+4.8
New Orders67.761.6+6.1GrowingFaster261.556.4+5.1
Employment42.143.1-1.0ContractingFaster544.342.1+2.2
Supplier Deliveries55.257.5-2.3SlowingSlower1455.856.9-1.1
Inventories52.060.7-8.7GrowingSlower247.050.5-3.5
Prices57.662.4-4.8IncreasingSlower453.251.3+1.9
Backlog of Orders55.951.9+4.0GrowingFaster251.845.3+6.5
New Export Orders49.358.9-9.6ContractingFrom Growing150.447.6+2.8
Imports46.352.9-6.6ContractingFrom Growing153.148.8+4.3
Inventory Sentiment50.055.9-5.9UnchangedFrom Too High1N/AN/AN/A
Customers’ InventoriesN/AN/AN/AN/AN/AN/A41.644.6-3.0
Overall EconomyGrowingFaster2
Services SectorGrowingFaster2
Non-Manufacturing ISM Report On Business data is seasonally adjusted for the Business Activity, New Orders, Prices and Employment indexes. Manufacturing ISM Report On Business data is seasonally adjusted for New Orders, Production, Employment and Inventories indexes.
**Number of months moving in current direction

The ISM Manufacturing Index (PMI) also came in stronger than expected in July, up to 54.2% from 52.6% in June. The PMI also exceeded pre-pandemic levels, hitting the highest level since April 2019.

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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.

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