Sections: Economy

ISM: U.S. Service Sector Growth Slowed More than Views in December

A service sector employee sits at his desk. (Photo: REUTERS)

The Non-Manufacturing ISM Report On Business showed service sector growth fell to 55.3 in December from 55.9, far below expectations for a 56 gain. Institute for Supply Management’s gauge of service sector growth is based on data compiled from monthly surveys sent to more than 375 purchasing executives working in the non-manufacturing industries across the country.

Readings above 50 indicate expansion, while those below point to contraction.

“According to the NMI, 11 non-manufacturing industries reported growth in December. Faster deliveries in December contributed to the overall slight slowing in the rate of growth according to the NMI composite index,” said Anthony Nieves, chair of the Institute for Supply Management Non-Manufacturing Business Survey Committee. “All of the other component indexes increased in the month of December. The majority of respondents’ comments remain positive about business conditions and the overall economy.”

The 11 non-manufacturing industries reporting growth in December — listed in order — are: Accommodation & Food Services; Management of Companies & Support Services; Health Care & Social Assistance; Information; Retail Trade; Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Finance & Insurance; Construction; Professional, Scientific & Technical Services; and Utilities. The five industries reporting contraction in December are: Other Services; Educational Services; Wholesale Trade; Public Administration; and Transportation & Warehousing.

ISM^® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM^® NON-MANUFACTURING AND ISM^® MANUFACTURING SURVEYS* DECEMBER 2015
	Non-Manufacturing						Manufacturing
Index	Series Index Dec	Series Index Nov	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index Dec	Series Index Nov	Percent Point Change
NMI^®/PMI^®	55.3	55.9	-0.6	Growing	Slower	71	48.2	48.6	-0.4
Business Activity/Production	58.7	58.2	+0.5	Growing	Faster	77	49.8	49.2	+0.6
New Orders	58.2	57.5	+0.7	Growing	Faster	77	49.2	48.9	+0.3
Employment	55.7	55.0	+0.7	Growing	Faster	22	48.1	51.3	-3.2
Supplier Deliveries	48.5	53.0	-4.5	Faster	From Slower	1	50.3	50.6	-0.3
Inventories	53.0	54.5	-1.5	Growing	Slower	9	43.5	43.0	+0.5
Prices	49.7	50.3	-0.6	Decreasing	From Increasing	1	33.5	35.5	-2.0
Backlog of Orders	50.0	51.5	-1.5	Unchanged	From Growing	1	41.0	43.0	-2.0
New Export Orders	53.5	49.5	+4.0	Growing	From Contracting	1	51.0	47.5	+3.5
Imports	49.0	51.0	-2.0	Contracting	From Growing	1	45.5	49.0	-3.5
Inventory Sentiment	64.5	63.5	+1.0	Too High	Faster	223	N/A	N/A	N/A
Customers’ Inventories	N/A	N/A	N/A	N/A	N/A	N/A	51.5	50.5	+1.0
Overall Economy				Growing	Slower	77
Non-Manufacturing Sector				Growing	Slower	71

* 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.

READ FULL STORY

Subscribe Sign In

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.