Economy

ISM Non-Manufacturing Index (NMI) Expectedly Ticks Down

A waitress serves a steak and fried shrimp combo plate to a customer at Norms Diner on La Cienega Boulevard in Los Angeles, California May 20, 2015. (Photo: Reuters)

The Non-Manufacturing Index (NMI), the Institute for Supply Management (ISM) gauge of service sector activity, came in at an expected 56.9 in May. Seventeen of the 18 service sector industries reported growth, leaving only Educational Services in contraction.

“Although the non-manufacturing sector’s growth rate dipped in May, the sector continues to reflect strength, buoyed by the strong rate of growth in the Employment Index,” Anthony Nieves, the Chair of the Institute for ISM Non-Manufacturing Business Survey Committee said. “The majority of respondents’ comments continue to indicate optimism about business conditions and the overall economy.”

Backlogs, at 57.0, were very strong in the May Report on Business, which partly explain the boom in private-sector hiring for the month.

ISM^® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM^® NON-MANUFACTURING AND ISM^® MANUFACTURING SURVEYS* MAY 2017
	Non-Manufacturing						Manufacturing
Index	Series Index May	Series Index Apr	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index May	Series Index Apr	Percent Point Change
NMI^®/PMI^®	56.9	57.5	-0.6	Growing	Slower	89	54.9	54.8	+0.1
Business Activity/Production	60.7	62.4	-1.7	Growing	Slower	94	57.1	58.6	-1.5
New Orders	57.7	63.2	-5.5	Growing	Slower	94	59.5	57.5	+2.0
Employment	57.8	51.4	+6.4	Growing	Faster	39	53.5	52.0	+1.5
Supplier Deliveries	51.5	53.0	-1.5	Slowing	Slower	17	53.1	55.1	-2.0
Inventories	54.0	52.5	+1.5	Growing	Faster	2	51.5	51.0	+0.5
Prices	49.2	57.6	-8.4	Decreasing	From Increasing	1	60.5	68.5	-8.0
Backlog of Orders	57.0	53.5	+3.5	Growing	Faster	4	55.0	57.0	-2.0
New Export Orders	54.5	65.5	-11.0	Growing	Slower	4	57.5	59.5	-2.0
Imports	48.5	53.0	-4.5	Contracting	From Growing	1	53.5	55.5	-2.0
Inventory Sentiment	63.0	60.0	+3.0	Too High	Faster	240	N/A	N/A	N/A
Customers’ Inventories	N/A	N/A	N/A	N/A	N/A	N/A	49.5	45.5	+4.0
Overall Economy				Growing	Slower	94
Non-Manufacturing Sector				Growing	Slower	89

* 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.

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PPD Business Staff

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