(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.
