INDUSTRY PERFORMANCE (Based on the NMI)
The 11 industries reporting growth in September based on the NMI composite index - listed in order - are: Management of Companies & Support Services; Information; Professional, Scientific & Technical Services; Wholesale Trade; Utilities; Accommodation & Food Services; Finance & Insurance; Other Services; Health Care & Social Assistance; Retail Trade; and Transportation & Warehousing. The three industries reporting contraction in September are: Mining; Public Administration; and Educational Services.
WHAT RESPONDENTS ARE SAYING …
- “General state of the business has not changed in the last three months. The market is still soft for new sales due to financing requirements.” (Construction)
- “Business seems to be flat from last month.” (Finance & Insurance)
- “Signs that the economy may be improving, but our sector is still flat or declining.” (Professional, Scientific & Technical Services)
- “Business activity is generally stable — slightly better than last year.” (Accommodation & Food Services)
- “Third quarter is looking profitable with improving confidence and expectations in the economy. Capital expenditures are being approved.” (Wholesale Trade)
SEPTEMBER 2010 NON-MANUFACTURING INDEX SUMMARIES
NMI (Non-Manufacturing Index)
In September, the NMI registered 53.2 percent, indicating continued growth in the non-manufacturing sector for the ninth consecutive month. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.
Business Activity
ISM’s Non-Manufacturing Business Activity Index in September registered 52.8 percent, a decrease of 1.6 percentage points when compared to the 54.4 percent registered in August. Ten industries reported increased business activity, and four industries reported decreased activity for the month of September. Four industries reported no change from August. Comments from respondents include: “Not as many projects going on as last year” and “Order cancellations, delays [and] pricing pressures.”
The industries reporting growth of business activity in September — listed in order — are: Management of Companies & Support Services; Accommodation & Food Services; Finance & Insurance; Utilities; Professional, Scientific & Technical Services; Health Care & Social Assistance; Wholesale Trade; Retail Trade; Transportation & Warehousing; and Information. The industries reporting decreased business activity in September are: Mining; Public Administration; Other Services; and Educational Services.
New Orders
ISM’s Non-Manufacturing New Orders Index grew in September for the 13th consecutive month. The index registered 54.9 percent, which is an increase of 2.5 percentage points from the 52.4 percent reported in August. Comments from respondents include: “Clients deciding to act and not wait any longer” and “Major and minor capital expenditures.”
The eight industries reporting growth of new orders in September - listed in order - are: Management of Companies & Support Services; Information; Accommodation & Food Services; Professional, Scientific & Technical Services; Health Care & Social Assistance; Utilities; Finance & Insurance; and Transportation & Warehousing. The seven industries reporting contraction of new orders in September — listed in order — are: Mining; Other Services; Construction; Retail Trade; Educational Services; Wholesale Trade; and Public Administration.
Employment
Employment activity in the non-manufacturing sector grew in September, as ISM’s Non-Manufacturing Employment Index registered 50.2 percent. This reflects an increase of 2 percentage points when compared to the 48.2 percent registered in August. Nine industries reported increased employment, six industries reported decreased employment, and three industries reported unchanged employment compared to August. Comments from respondents include: “New sales and business initiatives” and “Increased business activity.”
The industries reporting an increase in employment in September - listed in order - are: Mining; Information; Management of Companies & Support Services; Other Services; Construction; Retail Trade; Wholesale Trade; Professional, Scientific & Technical Services; and Transportation & Warehousing. The industries reporting a reduction in employment in September - listed in order - are: Real Estate, Rental & Leasing; Public Administration; Accommodation & Food Services; Health Care & Social Assistance; Finance & Insurance; and Educational Services.
Supplier Deliveries
The Supplier Deliveries Index registered 55 percent in September, 4 percentage points higher than the 51 percent registered in August, indicating that supplier deliveries continued to slow in September. A reading above 50 percent indicates slower deliveries.
The six industries reporting slower deliveries in September - listed in order - are: Real Estate, Rental & Leasing; Other Services; Wholesale Trade; Educational Services; Retail Trade; and Public Administration. The three industries reporting faster supplier deliveries in September are: Management of Companies & Support Services; Finance & Insurance; and Health Care & Social Assistance.
Inventories
ISM’s Non-Manufacturing Inventories Index registered 47 percent in September, indicating that inventory levels contracted in September after five consecutive months of growth. Of the total respondents in September, 34 percent indicated they do not have inventories or do not measure them. Comments from respondents include: “Not replenishing stock” and “Some of the inventory reduction is due to the seasonality of our business, [and] some due to the softness of the current market.”
The three industries reporting an increase in inventories in September are: Professional, Scientific & Technical Services; Information; and Wholesale Trade. The six industries reporting decreases in inventories in September - listed in order - are: Management of Companies & Support Services; Mining; Arts, Entertainment & Recreation; Finance & Insurance; Public Administration; and Retail Trade.
Prices
Prices paid by non-manufacturing organizations for purchased materials and services increased in September at a slightly slower rate than in August. ISM’s Non-Manufacturing Prices Index for September registered 60.1 percent, 0.2 percentage point lower than the 60.3 percent reported in August. In September, the percentage of respondents reporting higher prices is 22 percent, the percentage indicating no change in prices paid is 70 percent, and 8 percent of the respondents reported lower prices.
In September, 10 industries reported an increase in prices paid, in the following order: Mining; Wholesale Trade; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Information; Arts, Entertainment & Recreation; Retail Trade; Public Administration; Professional, Scientific & Technical Services; and Health Care & Social Assistance. The four industries reporting prices as decreasing for the month of September are: Management of Companies & Support Services; Transportation & Warehousing; Educational Services; and Finance & Insurance.
Backlog of Orders
ISM’s Non-Manufacturing Backlog of Orders Index contracted in September after four consecutive months of growth. The index registered 48 percent, 2.5 percentage points lower than the 50.5 percent reported in August. Of the total respondents in September, 49 percent indicated they do not measure backlog of orders.
The four industries reporting an increase in order backlogs in September are: Educational Services; Retail Trade; Finance & Insurance; and Health Care & Social Assistance. The six industries reporting lower backlog of orders in September - listed in order - are: Mining; Other Services; Public Administration; Construction; Wholesale Trade; and Professional, Scientific & Technical Services.
New Export Orders
Orders and requests for services and other non-manufacturing activities to be provided outside of the United States by domestically based personnel grew significantly in September after one month of contraction. The New Export Orders Index for September registered 58 percent, which is 11.5 percentage points higher than the 46.5 percent registered in August. Of the total respondents in September, 67 percent indicated they either do not perform, or do not separately measure, orders for work outside of the United States.
The six industries reporting an increase in new export orders in September - listed in order - are: Professional, Scientific & Technical Services; Information; Retail Trade; Other Services; Accommodation & Food Services; and Finance & Insurance. The two industries reporting a decrease in export orders in September are: Agriculture, Forestry, Fishing & Hunting; and Wholesale Trade.
Imports
The ISM Non-Manufacturing Imports Index grew in September for the second consecutive month. The index registered 53 percent, which is 2.5 percentage points higher than the 50.5 percent reported in August. In September, 61 percent of respondents reported that they do not use, or do not track, the use of imported materials.
The three industries reporting an increase in the use of imports in September are: Other Services; Finance & Insurance; and Accommodation & Food Services. The two industries reporting a decrease in imports for the month of September are: Agriculture, Forestry, Fishing & Hunting; and Retail Trade. Twelve industries reported no change in imports for the month of September.
Inventory Sentiment
The ISM Non-Manufacturing Inventory Sentiment Index in September registered 59.5 percent, which is 0.5 percentage point lower than the 60 percent reported in August. This indicates that respondents believe their inventories are too high at this time. In September, 27 percent of respondents said their inventories were too high, 8 percent said their inventories were too low, and 65 percent said their inventories were about right.
The six industries reporting a feeling that their inventories are too high in September - listed in order - are: Other Services; Wholesale Trade; Finance & Insurance; Professional, Scientific & Technical Services; Health Care & Social Assistance; and Retail Trade. The three industries that reported that their inventories are too low in September are: Accommodation & Food Services; Management of Companies & Support Services; and Construction.
