Press Release: NMI(R) at 59.9%; January -2-

02/05/18 10:15 AM EST

ISM(R) 's Non-Manufacturing New Orders Index registered 62.7 percent, an increase of 8.2 percentage points from the seasonally adjusted December reading of 54.5 percent. January represents growth in new orders for the 84th consecutive month, at a much faster rate compared with December. Comments from respondents include: "Budgeted monies are now available" and "Continued increased spending based on tax benefit and general improving economy."

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

 
New Orders   %Higher  %Same  %Lower  Index 
Jan 2018     32       50     18      62.7 
Dec 2017     25       54     21      54.5 
Nov 2017     30       57     13      58.8 
Oct 2017     35       52     13      62.6 
 

Employment

Employment activity in the non-manufacturing sector grew in January for the 47th consecutive month. ISM(R) 's Non-Manufacturing Employment Index registered 61.6 percent, which reflects an increase of 5.3 percentage points when compared to the December reading of 56.3 percent. Thirteen industries reported increased employment, and two industries reported decreased employment. Comments from respondents include: "We hired for new product development and launch" and "Filling more open positions."

The 13 industries reporting an increase in employment in January -- listed in order -- are: Arts, Entertainment & Recreation; Management of Companies & Support Services; Retail Trade; Real Estate, Rental & Leasing; Educational Services; Utilities; Transportation & Warehousing; Construction; Wholesale Trade; Health Care & Social Assistance; Public Administration; Finance & Insurance; and Other Services. The two industries reporting a reduction in employment in January are: Information; and Mining.

 
Employment   %Higher  %Same  %Lower  Index 
Jan 2018     26       62     12      61.6 
Dec 2017     25       62     13      56.3 
Nov 2017     23       61     16      55.4 
Oct 2017     24       65     11      57.0 
 

Supplier Deliveries

Supplier deliveries were slower in January for the 25th consecutive month. The index registered 55.5 percent, which is the same reading that was registered in December. A reading above 50 percent indicates slower deliveries, while a reading below 50 percent indicates faster deliveries. Comments from respondents include: "Weather in the South and East is impacting deliveries" and "Slowness due to weather and capacity constraints in transportation."

The 14 industries reporting slower deliveries in January -- listed in order -- are: Agriculture, Forestry, Fishing & Hunting; Mining; Educational Services; Wholesale Trade; Management of Companies & Support Services; Accommodation & Food Services; Construction; Other Services; Transportation & Warehousing; Retail Trade; Finance & Insurance; Health Care & Social Assistance; Public Administration; and Information. The only industry reporting faster deliveries in January is Professional, Scientific & Technical Services.

 
Supplier Deliveries   %Slower  %Same  %Faster  Index 
Jan 2018              17       77     6        55.5 
Dec 2017              15       81     4        55.5 
Nov 2017              11       86     3        54.0 
Oct 2017              17       82     1        58.0 
 

Inventories

ISM(R) 's Non-Manufacturing Inventories Index contracted in January for the first time after nine consecutive months of growth and registered 49 percent, 4.5 percentage points lower than the 53.5 percent that was reported in December. Of the total respondents in January, 30 percent indicated they do not have inventories or do not measure them. Comments from respondents include: "Inventories low for post-[holiday] season and currently not reordering" and "Using stock material and not replenishing."

The five industries reporting an increase in inventories in January are: Finance & Insurance; Real Estate, Rental & Leasing; Health Care & Social Assistance; Public Administration; and Transportation & Warehousing. The six industries reporting decreases in inventories in January -- listed in order -- are: Accommodation & Food Services; Construction; Professional, Scientific & Technical Services; Utilities; Information; and Retail Trade.

 
Inventories   %Higher  %Same  %Lower  Index 
Jan 2018      19       60     21      49.0 
Dec 2017      24       59     17      53.5 
Nov 2017      26       57     17      54.5 
Oct 2017      22       61     17      52.5 
 

Prices

Prices paid by non-manufacturing organizations for purchased materials and services increased in January for the 23rd consecutive month. ISM(R) 's Non-Manufacturing Prices Index registered 61.9 percent, 2 percentage points higher than the seasonally adjusted 59.9 percent reported in December. Twenty-six percent of respondents reported higher prices, 70 percent indicated no change in prices paid and 4 percent of respondents reported lower prices.

The 15 non-manufacturing industries reporting an increase in prices paid during the month of January -- listed in order -- are: Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; Construction; Mining; Transportation & Warehousing; Finance & Insurance; Accommodation & Food Services; Utilities; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Other Services; Public Administration; Retail Trade; Information; and Health Care & Social Assistance. The only industry reporting a decrease in prices paid during the month of January is Management of Companies & Support Services.

 
Prices     %Higher  %Same  %Lower  Index 
Jan 2018   26       70     4       61.9 
Dec 2017   21       72     7       59.9 
Nov 2017   21       73     6       60.1 
Oct 2017   27       66     7       61.5 
 

NOTE: Commodities reported as up in price and down in price are listed in the commodities section of this report.

Backlog of Orders

ISM(R) 's Non-Manufacturing Backlog of Orders grew in January. The index registered 50.5 percent, which is 0.5 percentage point higher than the 50 percent reported in December. Of the total respondents in January, 38 percent indicated they do not measure backlog of orders.

The seven industries reporting an increase in order backlogs in January -- listed in order -- are: Utilities; Finance & Insurance; Management of Companies & Support Services; Accommodation & Food Services; Construction; Public Administration; and Professional, Scientific & Technical Services. The five industries reporting a decrease in order backlogs in January are: Other Services; Information; Health Care & Social Assistance; Transportation & Warehousing; and Wholesale Trade.

 
Backlog of Orders   %Higher  %Same  %Lower  Index 
Jan 2018            16       69     15      50.5 
Dec 2017            13       74     13      50.0 
Nov 2017            16       71     13      51.5 
Oct 2017            18       71     11      53.5 
 

New Export Orders

Orders and requests for services and other non-manufacturing activities to be provided outside of the U.S. by domestically based personnel grew in January for the 12th consecutive month at a faster rate. The New Export Orders Index registered 58 percent, which is 1.5 percentage points higher than the 56.5 percent reported in December. Of the total respondents in January, 64 percent indicated they either do not perform, or do not separately measure, orders for work outside of the U.S.

The 10 industries reporting an increase in new export orders in January -- listed in order -- are: Construction; Mining; Management of Companies & Support Services; Real Estate, Rental & Leasing; Public Administration; Information; Accommodation & Food Services; Transportation & Warehousing; Wholesale Trade; and Professional, Scientific & Technical Services. The only industry reporting a decrease in exports is Retail Trade.

 
New Export Orders   %Higher  %Same  %Lower  Index 
Jan 2018            22       72     6       58.0 
Dec 2017            18       77     5       56.5 
Nov 2017            20       74     6       57.0 
Oct 2017            28       64     8       60.0 
 

Imports

The Imports Index reading of 54 percent is 1.5 percentage points higher than the 52.5 percent that was reported in December. Fifty-three percent of respondents reported that they do not use, or do not track the use of, imported materials.

The eight industries reporting an increase in imports for the month of January -- listed in order -- are: Other Services; Agriculture, Forestry, Fishing & Hunting; Real Estate, Rental & Leasing; Mining; Health Care & Social Assistance; Accommodation & Food Services; Wholesale Trade; and Construction. The two industries reporting a decrease in imports in the month of January are: Information; and Retail Trade. Six industries reported no change in January compared to December.

 
Imports    %Higher  %Same  %Lower  Index 
Jan 2018   14       80     6       54.0 
Dec 2017   14       77     9       52.5 
Nov 2017   10       85     5       52.5 
Oct 2017   13       78     9       52.0 
 

Inventory Sentiment

The ISM(R) Non-Manufacturing Inventory Sentiment Index in January registered 61 percent, which is 1.5 percentage points lower than the reading of 62.5 percent reported in December. This indicates that respondents believe their inventories are still too high at this time. In January, 29 percent of respondents said their inventories were too high, 7 percent of the respondents said their inventories were too low, and 64 percent said their inventories were about right.

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

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