Press Release: NMI(R) at 59.9%; January Non-Manufacturing ISM(R) Report On Business(R); Business Activity Index at 59.8%; New Orders Index at 62.7%; Employment Index at 61.6%

02/05/18 10:15 AM EST

NMI(R) at 59.9%; January Non-Manufacturing ISM(R) Report On Business(R); Business Activity Index at 59.8%; New Orders Index at 62.7%; Employment Index at 61.6%

PR Newswire

TEMPE, Ariz., Feb. 5, 2018

This report reflects the recently completed annual adjustments to the seasonal factors used to calculate the indexes.

TEMPE, Ariz., Feb. 5, 2018 /PRNewswire/ -- Economic activity in the non-manufacturing sector grew in January for the 96th 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 59.9 percent, which is 3.9 percentage points higher than the seasonally adjusted December reading of 56 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased to 59.8 percent, 2 percentage points higher than the seasonally adjusted December reading of 57.8 percent, reflecting growth for the 102nd consecutive month, at a faster rate in January. The New Orders Index registered 62.7 percent, 8.2 percentage points higher than the seasonally adjusted reading of 54.5 percent in December. The Employment Index increased 5.3 percentage points in January to 61.6 percent from the seasonally adjusted December reading of 56.3 percent. The Prices Index increased by 2 percentage points from the seasonally adjusted December reading of 59.9 percent to 61.9 percent, indicating that prices increased in January for the 23rd consecutive month. According to the NMI(R) , 15 non-manufacturing industries reported growth. The non-manufacturing sector reflected strong growth in January after two consecutive months of pullback. Overall, the majority of respondents' comments are positive about business conditions and the economy. They also indicated that recent tax changes have had a positive impact on their respective businesses."

INDUSTRY PERFORMANCE

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

WHAT RESPONDENTS ARE SAYING...

   -- "Executive management [is] excited about tax breaks for CapEx purchases 
      in [the] new tax bill." (Information) 
 
   -- "Month-over-month steady growth, on average, [is] 3 percent on project 
      volume and 1 percent on total revenue."(Construction) 
 
   -- "Signs of strong growth [in] financial performance expectations given the 
      recent tax changes." (Finance & Insurance) 
 
   -- "Positive outlook for 2018. We see huge pricing pressure." (Health Care & 
      Social Assistance) 
 
   -- "Business is starting off solid." (Accommodation & Food Services) 
 
   -- "First quarter begins slow like 2017, but expect things to pick up later 
      in Q1. Outlook continues to look bright for 2018." (Professional, 
      Scientific & Technical Services) 
 
   -- "Business activity is low due to the continued partial funding [of] bills 
      passed (continuing resolutions)." (Public Administration) 
 
   -- "Overall, sales velocity looks strong. Some regional differences due to 
      weather conditions, but overall, a strong month." (Wholesale Trade) 
 
ISM(R) NON-MANUFACTURING SURVEY RESULTS AT A GLANCE 
 COMPARISON OF ISM(R) NON-MANUFACTURING AND ISM(R) MANUFACTURING SURVEYS* 
 JANUARY 2018 
Index         Non-Manufacturing                                           Manufacturing 
              Series  Series  Percent                                     Series  Series  Percent 
               Index   Index   Point                Rate of    Trend**     Index   Index   Point 
               Jan     Dec     Change  Direction     Change     (Months)   Jan     Dec     Change 
NMI(R) 
 /PMI(R)      59.9    56.0    +3.9     Growing      Faster     96         59.1    59.3    -0.2 
Business 
 Activity/ 
 Production   59.8    57.8    +2.0     Growing      Faster     102        64.5    65.2    -0.7 
New Orders    62.7    54.5    +8.2     Growing      Faster     84         65.4    67.4    -2.0 
Employment    61.6    56.3    +5.3     Growing      Faster     47         54.2    58.1    -3.9 
Supplier 
 Deliveries   55.5    55.5    0.0      Slowing      Same       25         59.1    57.2    +1.9 
                                                    From 
Inventories   49.0    53.5    -4.5     Contracting  Growing    1          52.3    48.5    +3.8 
Prices        61.9    59.9    +2.0     Increasing   Faster     23         72.7    68.3    +4.4 
Backlog of                                          From 
 Orders       50.5    50.0    +0.5     Growing      Unchanged  1          56.2    54.9    +1.3 
New Export 
 Orders       58.0    56.5    +1.5     Growing      Faster     12         59.8    57.6    +2.2 
Imports       54.0    52.5    +1.5     Growing      Faster     8          58.4    56.5    +1.9 
Inventory 
 Sentiment    61.0    62.5    -1.5     Too High     Slower     248        N/A     N/A     N/A 
Customers' 
 Inventories  N/A     N/A     N/A      N/A          N/A        N/A        45.6    42.9    +2.7 
 
Overall Economy 
 Non-Manufacturing Sector              Growing      Faster     101 
                                       Growing      Faster     96 
 

*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.

Indexes reflect newly released seasonal adjustment factors.

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

Commodities Up in Price

Aircraft Parts; Aluminum Products; Bacon (2); Chemical Products; Copper; Copper Products (6); Copper Wire; #1 Diesel Fuel (8); #2 Diesel Fuel (6); Electrical Equipment; Fuel; Gasoline (6); Labor -- Construction (11); Lumber Products (7); Natural Gas (3); Paper (2); Poly Products; Steel; Steel Plate; Steel Products (4); Transportation Costs and Transportation Services.

Commodities Down in Price

Chicken Products.

Commodities in Short Supply

Coated Freesheet; Construction Subcontractors; IV Solutions (6); Labor (6); Labor -- Construction (22); and Labor -- Temporary (5).

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

JANUARY 2018 NON-MANUFACTURING INDEX SUMMARIES

NMI(R) In January, the NMI(R) registered 59.9 percent, 3.9 percentage points higher than the seasonally adjusted 56 percent registered in December, indicating continued growth in the non-manufacturing sector for the 96th 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 49 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the January NMI(R) indicates growth for the 101st consecutive month in the overall economy, and indicates expansion in the non-manufacturing sector for the 96th consecutive month. Nieves says, "The past relationship between the NMI(R) and the overall economy indicates that the NMI(R) for January (59.9 percent) corresponds to a 4.0 percent increase in real gross domestic product (GDP) on an annualized basis."

NMI(R) HISTORY

 
Month       NMI(R)  Month     NMI(R) 
Jan 2018    59.9    Jul 2017  54.3 
Dec 2017    56.0    Jun 2017  57.2 
Nov 2017    57.3    May 2017  57.1 
Oct 2017    59.8    Apr 2017  57.3 
Sep 2017    59.4    Mar 2017  55.6 
Aug 2017    55.2    Feb 2017  57.4 
Average for 12 months -- 57.2 
 High -- 59.9 
 Low -- 54.3 
 

Business Activity

ISM(R) 's Business Activity Index registered 59.8 percent in January, an increase of 2.0 percentage points from the seasonally adjusted December reading of 57.8 percent. This represents growth in business activity for the 102nd consecutive month. Eleven industries reported increased business activity, and seven industries reported decreased activity for the month of January. Comments from respondents include: "Post holiday pickup" and "New customer dollars available for spending in [the] new year."

The 11 industries reporting growth of business activity in January -- listed in order -- are: Mining; Utilities; Arts, Entertainment & Recreation; Health Care & Social Assistance; Real Estate, Rental & Leasing; Public Administration; Transportation & Warehousing; Construction; Finance & Insurance; Retail Trade; and Management of Companies & Support Services. The seven industries reporting a decrease in business activity in January -- listed in order -- are: Information; Other Services; Accommodation & Food Services; Wholesale Trade; Professional, Scientific & Technical Services; Educational Services; and Agriculture, Forestry, Fishing & Hunting.

 
Business Activity   %Higher  %Same  %Lower  Index 
Jan 2018            31       48     21      59.8 
Dec 2017            29       52     19      57.8 
Nov 2017            32       57     11      61.1 
Oct 2017            34       53     13      61.5 
 

New Orders

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February 05, 2018 10:15 ET (15:15 GMT)

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