Press Release: NMI(R) at 57.4%; November Non-Manufacturing ISM(R) Report On Business(R)

12/05/17 10:15 AM EST

NMI(R) at 57.4%; November Non-Manufacturing ISM(R) Report On Business(R)

Business Activity Index at 61.4%; New Orders Index at 58.7%; Employment Index at 55.3%

PR Newswire

TEMPE, Ariz., Dec. 5, 2017

TEMPE, Ariz., Dec. 5, 2017 /PRNewswire/ -- Economic activity in the non-manufacturing sector grew in November for the 95th 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 57.4 percent, which is 2.7 percentage points lower than the October reading of 60.1 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 61.4 percent, 0.8 percentage point lower than the October reading of 62.2 percent, reflecting growth for the 100th consecutive month, at a slightly slower rate in November. The New Orders Index registered 58.7 percent, 4.1 percentage points lower than the reading of 62.8 percent in October. The Employment Index decreased 2.2 percentage points in November to 55.3 percent from the October reading of 57.5 percent. The Prices Index decreased by 2 percentage points from the October reading of 62.7 percent to 60.7 percent, indicating prices increased in November for the sixth consecutive month. According to the NMI(R) , 16 non-manufacturing industries reported growth. The rate of growth has lessened in the non-manufacturing sector after two very strong months of growth. Comments from the survey respondents indicate that the economy and sector will continue to grow for the remainder of the year."

INDUSTRY PERFORMANCE

The 16 non-manufacturing industries reporting growth in November -- listed in order -- are: Retail Trade; Wholesale Trade; Utilities; Transportation & Warehousing; Real Estate, Rental & Leasing; Educational Services; Health Care & Social Assistance; Arts, Entertainment & Recreation; Other Services; Public Administration; Information; Finance & Insurance; Construction; Management of Companies & Support Services; Accommodation & Food Services; and Professional, Scientific & Technical Services. The only industry reporting contraction in November is Agriculture, Forestry, Fishing & Hunting.

WHAT RESPONDENTS ARE SAYING ...

   -- "Domestic business is strong, with positive growth indicators for 2018 
      from both internal sources and client feedback." (Management of Companies 
      & Support Services) 
 
   -- "Construction labor continues to be constrained in the West." 
      (Construction) 
 
   -- "Steady; no material changes." (Finance & Insurance) 
 
   -- "We continue to struggle with understanding the [potential] changes to 
      the Affordable Care Act, and are trying to be flexible in how we respond. 
      Also, Hurricane Maria has affected some of our pharmaceutical supplies." 
      (Health Care & Social Assistance) 
 
   -- "Mixed bag of goods for November 2017. Typical seasonal increases for 
      specific braising cuts of beef as the holidays approach. Some volatility 
      on produce items such as brussel sprouts. Expect cream to spike due to 
      holiday season." (Accommodation & Food Services) 
 
   -- "Business seems to be leveling off. Attribute this to the holiday season 
      that is approaching." (Professional, Scientific & Technical Services) 
 
   -- "Business is strong, but not as strong as Q3." (Retail Trade) 
 
   -- "Bookings would suggest a strong run to the end of the year." (Wholesale 
      Trade) 
 
ISM(R) NON-MANUFACTURING SURVEY RESULTS AT A GLANCE 
 COMPARISON OF ISM(R) NON-MANUFACTURING AND ISM(R) MANUFACTURING SURVEYS* 
 NOVEMBER 2017 
 
Index         Non-Manufacturing                                       Manufacturing 
              Series  Series  Percent              Rate               Series  Series 
               Index   Index  Point                of      Trend**     Index   Index  Percent Point 
               Nov     Oct    Change   Direction   Change   (Months)   Nov     Oct     Change 
NMI(R) 
 /PMI(R)      57.4    60.1    -2.7     Growing     Slower  95         58.2    58.7    -0.5 
Business 
 Activity/ 
 Production   61.4    62.2    -0.8     Growing     Slower  100        63.9    61.0    +2.9 
New Orders    58.7    62.8    -4.1     Growing     Slower  100        64.0    63.4    +0.6 
Employment    55.3    57.5    -2.2     Growing     Slower  45         59.7    59.8    -0.1 
Supplier 
 Deliveries   54.0    58.0    -4.0     Slowing     Slower  23         56.5    61.4    -4.9 
Inventories   54.5    52.5    +2.0     Growing     Faster  8          47.0    48.0    -1.0 
Prices        60.7    62.7    -2.0     Increasing  Slower  6          65.5    68.5    -3.0 
Backlog of 
 Orders       51.5    53.5    -2.0     Growing     Slower  10         55.0    55.0    0.0 
New Export 
 Orders       57.0    60.0    -3.0     Growing     Slower  10         56.0    56.5    -0.5 
Imports       52.5    52.0    +0.5     Growing     Faster  6          54.5    54.0    +0.5 
Inventory 
 Sentiment    56.0    61.0    -5.0     Too High    Slower  246        N/A     N/A     N/A 
Customers' 
 Inventories  N/A     N/A     N/A      N/A         N/A     N/A        45.5    43.5    +2.0 
 
Overall Economy                        Growing     Slower  100 
 Non-Manufacturing Sector               Growing    Slower   95 
 

*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

Cheese (3); Copper Products (4); Corrugated Boxes (7); #1 Diesel Fuel (6); #2 Diesel Fuel (4); Fuel (5); Gasoline (4); Labor -- Construction (9); Lumber Products (5); Natural Gas; Paper; Paper Products; Plastic Products; and Steel Products* (2).

Commodities Down in Price

Bacon (3); Butter; Dairy Products (2); and Steel Products*.

Commodities in Short Supply

Integrated Circuits; IV Solutions (4); Groundwood; Labor (4); Labor -- Construction (20); and Labor --Temporary (3).

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

*Indicates both up and down in price.

NOVEMBER 2017 NON-MANUFACTURING INDEX SUMMARIES

NMI(R) In November, the NMI(R) registered 57.4 percent, 2.7 percentage points lower than the 60.1 percent registered in October, indicating continued growth in the non-manufacturing sector for the 95th 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 November NMI(R) indicates growth for the 100th consecutive month in the overall economy, and indicates expansion in the non-manufacturing sector for the 95th consecutive month. Nieves says, "The past relationship between the NMI(R) and the overall economy indicates that the NMI(R) for November (57.4 percent) corresponds to a 3.3 percent increase in real gross domestic product (GDP) on an annualized basis."

NMI(R) HISTORY

 
Month       NMI(R)  Month     NMI(R) 
Nov 2017    57.4    May 2017  56.9 
Oct 2017    60.1    Apr 2017  57.5 
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 
Average for 12 months -- 57.0 
 High -- 60.1 
 Low -- 53.9 
 

Business Activity

ISM(R) 's Business Activity Index registered 61.4 percent in November, a decrease of 0.8 percentage point from the October reading of 62.2 percent. This represents growth in business activity for the 100th consecutive month. Fourteen industries reported increased business activity and two industries reported decreased activity for the month of November. Comments from respondents include: "More optimism in marketplace" and "Business has increased this past month in advance of the holiday season."

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

 
Business Activity   %Higher  %Same  %Lower  Index 
Nov 2017            32       57     11      61.4 
Oct 2017            34       53     13      62.2 
Sep 2017            37       49     14      61.3 
Aug 2017            32       52     16      57.5 
 

New Orders

ISM(R) 's Non-Manufacturing New Orders Index registered 58.7 percent, a decrease of 4.1 percentage points from the October reading of 62.8 percent. November represents growth in new orders for the 100th consecutive month, at a slower rate compared with October. Comments from respondents include: "People are trying to spend their budgets before our fiscal year-end in December" and "New business gained."

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December 05, 2017 10:15 ET (15:15 GMT)

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