USA Non-Manufacturing Index (NMI) by the Institute for Supply Management
Official Statement by the Institute for Supply Management (Tempe, Arizona) Economic activity in the non-manufacturing sector grew in June for the 19th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business. The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management Non-Manufacturing Business Survey Committee. "The NMI registered 53.3 percent in June, 1.3 percentage points lower than the 54.6 percent registered in May, and indicating continued growth at a slower rate in the non-manufacturing sector. "Respondents' comments are mixed about the business climate and vary by industry and company. The most prominent concern remains about the volatility of prices."
Trend The short-term trend has reversed to downwards, with 3 decreases in the past 4 months. The intermediate-term trend (6 months) continues downwards. The long-term trend (12 months) is now slightly downwards.
Cycle History The ISM Non-Manufacturing Index reached a Post-Great Recession cyclical high of 59.7 in February 2011. A Great Recession cyclical low of 37.2 was set in November 2008. The NMI is a percentage - not a total. More about the NMI below the chart.
Non-Manufacturing Index (Chart) Below is a chart of the Non-Manufacturing Index (NMI) of the Institute for Supply Management (ISM) from January 2010 through the latest month reported.
Commentary The USA services sector expanded for the 19th consecutive month in June 2011 and the rate decreased. The decrease in growth is disappointing, as the manufacturing sector expanded in June. The NMI decreased -1.3 in June, after increasing +1.8 in May, plunging -4.5 in April, and decreasing -2.4 in March. The related USA manufacturing sector Purchasing Managers' Index (PMI) plunged in May and is reviewed here [USA Manufacturing Growth Increases in June (Chart) *Sector expands for 23rd month].
About The NMI
Level of the NMI The NMI is a composite index based on the diffusion indexes for four of the indicators with equal weights: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted) and Supplier Deliveries. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. An index reading above 50 percent indicates that the non-manufacturing economy in that index is generally expanding; below 50 percent indicates that it is generally declining. Supplier Deliveries is an exception. A Supplier Deliveries Index above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries.
NMI Components The Non-Manufacturing ISM Report On Business is based on data compiled from purchasing and supply executives nationwide. Membership of the Non-Manufacturing Business Survey Committee is diversified by NAICS, based on each industry's contribution to gross domestic product (GDP). The Non-Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Agriculture, Forestry, Fishing & Hunting; Mining; Utilities; Construction; Wholesale Trade; Retail Trade; Transportation & Warehousing; Information; Finance & Insurance; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Management of Companies & Support Services; Educational Services; Health Care & Social Assistance; Arts, Entertainment & Recreation; Accommodation & Food Services; Public Administration; and Other Services (services such as Equipment & Machinery Repairing; Promoting or Administering Religious Activities; Grantmaking; Advocacy; and Providing Dry-Cleaning & Laundry Services, Personal Care Services, Death Care Services, Pet Care Services, Photofinishing Services, Temporary Parking Services, and Dating Services).
Non-Manufacturing Sector Plays a Significant Role in Economy The non-manufacturing sector currently makes up more than 80 percent of the gross domestic product (GDP). In addition to purchasing materials for production, manufacturing businesses also source for services from various non-manufacturing industries. Virtually every business is impacted by business activity in the non-manufacturing sector
About the Institute for Supply Management The Institute for Supply Management, established in 1915, is the largest supply management organization in the world as well as one of the most respected. ISM's mission is to lead the supply management profession through its standards of excellence, research, promotional activities and education.
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*Data courtesy of the Institute for Supply Management*
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