10-4-17 10:15 AM EDT | Email Article

NMI(R) at 59.8%; September Non-Manufacturing ISM(R) Report On Business(R)

PR Newswire

TEMPE, Ariz., Oct. 4, 2017

Business Activity Index at 61.3%; New Orders Index at 63.0%; Employment Index at 56.8%

TEMPE, Ariz., Oct. 4, 2017 /PRNewswire/ -- Economic activity in the non-manufacturing sector grew in September for the 93rd consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM(R) Report On Business(R) .

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management(R) (ISM(R) ) Non-Manufacturing Business Survey Committee: "The NMI(R) registered 59.8 percent, which is 4.5 percentage points higher than the August reading of 55.3 percent. This represents continued growth in the non-manufacturing sector at a faster rate. This is the highest reading since August 2005 when the index registered 61.3 percent. The Non-Manufacturing Business Activity Index increased to 61.3 percent, 3.8 percentage points higher than the August reading of 57.5 percent, reflecting growth for the 98th consecutive month, at a faster rate in September. The New Orders Index registered 63 percent, 5.9 percentage points higher than the reading of 57.1 percent in August. The Employment Index increased 0.6 percentage point in September to 56.8 percent from the August reading of 56.2 percent. The Prices Index increased substantially by 8.4 percentage points from the August reading of 57.9 percent to 66.3 percent, indicating prices increased in September for the fourth consecutive month. This is the highest reading since February 2012 when the index registered 67.6 percent. According to the NMI(R) , 15 non-manufacturing industries reported growth. The non-manufacturing sector has reflected strong growth in the month of September despite the impact on the supply chain from the recent hurricanes. Respondents' comments indicate a good outlook for business conditions."

INDUSTRY PERFORMANCE

The 15 non-manufacturing industries reporting growth in September -- listed in order -- are: Retail Trade; Other Services; Management of Companies & Support Services; Information; Utilities; Transportation & Warehousing; Real Estate, Rental & Leasing; Wholesale Trade; Construction; Professional, Scientific & Technical Services; Finance & Insurance; Health Care & Social Assistance; Public Administration; Educational Services; and Accommodation & Food Services. The two industries reporting contraction in September are: Arts, Entertainment & Recreation; and Mining.

WHAT RESPONDENTS ARE SAYING ...

   -- "Hurricane Irma caused a revenue challenge that will take some time to 
      recover from, interrupting business operations in that region and 
      offsetting growth in others." (Accommodation & Food Services) 
 
   -- "Our business continues to grow at a good pace." (Health Care & Social 
      Assistance) 
 
   -- "General outlook looking up, with sales picking up. That will drive spend 
      and investment." (Information) 
 
   -- "Overall, consistent growth in construction/office renovation jobs. Eight 
      percent more jobs and 6 percent more revenue." (Construction) 
 
   -- "Positive business trends continue in second half. Business results above 
      plan and higher year-to- year. Forecast above planned results for 2017." 
      (Finance & Insurance) 
 
   -- "Business still in a down trend due to lack of capital investment in 
      worldwide mining market." (Mining) 
 
   -- "Hurricane Harvey has been a disruption to normal business activity in 
      the oil and gas industry. Refineries and petrochemical plants were shut 
      down due to the storm, as were many offices along the Gulf Coast. 
      Business is just now returning to some sense of normalcy." (Professional, 
      Scientific & Technical Services) 
 
   -- "Continued growth; however, slower pace than in past. Expecting some 
      further disruptions due to weather in Texas and Florida." (Retail Trade) 
 
 
 ISM(R) NON-MANUFACTURING SURVEY RESULTS AT A GLANCE 
 COMPARISON OF ISM(R) NON-MANUFACTURING AND ISM(R) MANUFACTURING SURVEYS* 
 SEPTEMBER 2017 
Index         Non-Manufacturing                                       Manufacturing 
              Series  Series  Percent              Rate               Series  Series  Percent 
               Index   Index   Point               of       Trend**    Index   Index   Point 
               Sep     Aug     Change   Direction  Change   (Months)   Sep     Aug     Change 
NMI(R) 
 /PMI(R)      59.8    55.3    +4.5     Growing     Faster  93         60.8    58.8    +2.0 
Business 
 Activity/ 
 Production   61.3    57.5    +3.8     Growing     Faster  98         62.2    61.0    +1.2 
New Orders    63.0    57.1    +5.9     Growing     Faster  98         64.6    60.3    +4.3 
Employment    56.8    56.2    +0.6     Growing     Faster  43         60.3    59.9    +0.4 
Supplier 
 Deliveries   58.0    50.5    +7.5     Slowing     Faster  21         64.4    57.1    +7.3 
Inventories   51.5    53.5    -2.0     Growing     Slower  6          52.5    55.5    -3.0 
Prices        66.3    57.9    +8.4     Increasing  Faster  4          71.5    62.0    +9.5 
Backlog of 
 Orders       56.0    53.5    +2.5     Growing     Faster  8          58.0    57.5    +0.5 
New Export 
 Orders       56.0    55.0    +1.0     Growing     Faster  8          57.0    55.5    +1.5 
Imports       52.0    50.5    +1.5     Growing     Faster  4          54.0    54.5    -0.5 
Inventory 
 Sentiment    58.5    61.0    -2.5     Too High    Slower  244        N/A     N/A     N/A 
Customers' 
 Inventories  N/A     N/A     N/A      N/A         N/A     N/A        42.0    41.0    +1.0 
 
Overall Economy 
 Non-Manufacturing Sector              Growing     Faster  98 
                                       Growing     Faster  93 
 

*Non-Manufacturing ISM(R) Report On Business(R) data is seasonally adjusted for the Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM(R) Report On Business(R) data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.

**Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE, AND IN SHORT SUPPLY

Commodities Up in Price

Aluminum; Cheese; Copper Fittings; Copper Pipe; Copper Products (2); Corrugated Boxes (5); #1 Diesel Fuel (4); #2 Diesel Fuel (2); Fuel (3); Gasoline (2); Labor (6); Labor -- Construction (7); Lumber Products -- Plywood and Spruce (3); Medical/Surgical Supplies (3); Natural Gas; Paper (4); Polypropylene; Poly Products; PVC Products (2); Services; Tires; and Transportation Costs.

Commodities Down in Price

Bacon; Beef; and Beef Products (2).

Commodities in Short Supply

#1 Diesel Fuel; #2 Diesel Fuel; Electronic Parts; IV Solutions (2); Labor (2); Labor -- Construction (18); Labor -- Temporary; Medical Supplies (4); and PVC Products.

Note: The number of consecutive months the commodity is listed is indicated after each item.

SEPTEMBER 2017 NON-MANUFACTURING INDEX SUMMARIES

NMI(R) In September, the NMI(R) registered 59.8 percent, 4.5 percentage points higher than the 55.3 percent registered in August, indicating continued growth in the non-manufacturing sector for the 93rd 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.

An NMI(R) above 48.9 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the September NMI(R) indicates growth for the 98th consecutive month in the overall economy, and indicates expansion in the non-manufacturing sector for the 93rd consecutive month. Nieves says, "The past relationship between the NMI(R) and the overall economy indicates that the NMI(R) for September (59.8 percent) corresponds to a 4.2 percent increase in real gross domestic product (GDP) on an annualized basis."

NMI(R) HISTORY

 
Month       NMI(R)  Month     NMI(R) 
Sep 2017    59.8    Mar 2017  55.2 
Aug 2017    55.3    Feb 2017  57.6 
Jul 2017    53.9    Jan 2017  56.5 
Jun 2017    57.4    Dec 2016  56.6 
May 2017    56.9    Nov 2016  56.2 
Apr 2017    57.5    Oct 2016  54.6 
Average for 12 months -- 56.5 
 High -- 59.8 
 Low -- 53.9 
 

Business Activity

ISM(R) 's Business Activity Index registered 61.3 percent in September, an increase of 3.8 percentage points from the August reading of 57.5 percent. This represents growth in business activity for the 98th consecutive month. Fourteen industries reported increased business activity and three industries reported decreased activity for the month of September. Comments from respondents include: "New business gained" and "Entering our peak in the third quarter."

The 14 industries reporting growth of business activity in September -- listed in order -- are: Utilities; Retail Trade; Information; Other Services; Management of Companies & Support Services; Transportation & Warehousing; Real Estate, Rental & Leasing; Construction; Accommodation & Food Services; Wholesale Trade; Health Care & Social Assistance; Professional, Scientific & Technical Services; Public Administration; and Finance & Insurance. The three industries reporting a decrease in business activity in September are: Agriculture, Forestry, Fishing & Hunting; Educational Services; and Mining.

 
Business Activity   %Higher  %Same  %Lower  Index 
Sep 2017            37       49     14      61.3 
Aug 2017            32       52     16      57.5 
Jul 2017            29       58     13      55.9 
Jun 2017            32       58     10      60.8 
 

New Orders

ISM(R) 's Non-Manufacturing New Orders Index registered 63 percent, an increase of 5.9 percentage points from the August reading of 57.1 percent. September represents growth in new orders for the 98th consecutive month, at a faster rate compared with August. Comments from respondents include: "New customers who we contracted early in the year have completed the onboarding process and are coming online" and "New product launch."

(MORE TO FOLLOW) Dow Jones Newswires

October 04, 2017 10:15 ET (14:15 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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