Press Release: NMI(R) at 59.5%; February Non-Manufacturing ISM(R) Report On Business(R)
NMI(R) at 59.5%; February Non-Manufacturing ISM(R) Report On Business(R)
TEMPE, Ariz., March 5, 2018
Business Activity Index at 62.8%; New Orders Index at 64.8%; Employment Index at 55.0%
TEMPE, Ariz., March 5, 2018 /PRNewswire/ -- Economic activity in the non-manufacturing sector grew in February for the 97th 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 59.5 percent, which is 0.4 percentage point lower than the January reading of 59.9 percent. This represents continued growth in the non-manufacturing sector at a slightly slower rate. The Non-Manufacturing Business Activity Index increased to 62.8 percent, 3 percentage points higher than the January reading of 59.8 percent, reflecting growth for the 103rd consecutive month, at a faster rate in February. The New Orders Index registered 64.8 percent, 2.1 percentage points higher than the reading of 62.7 percent in January. The Employment Index decreased 6.6 percentage points in February to 55 percent from the January reading of 61.6 percent. The Prices Index decreased by 0.9 percentage point from the January reading of 61.9 percent to 61 percent, indicating that prices increased in February for the 24th consecutive month. According to the NMI(R) , 16 non-manufacturing industries reported growth. The non-manufacturing sector reflected the second consecutive month of strong growth in February. The decrease in the employment index possibly prevented an even stronger reading for the NMI(R) composite index. The majority of respondents' continue to be positive about business conditions and the economy."
The 16 non-manufacturing industries reporting growth in February -- listed in order -- are: Educational Services; Transportation & Warehousing; Utilities; Real Estate, Rental & Leasing; Wholesale Trade; Finance & Insurance; Management of Companies & Support Services; Professional, Scientific & Technical Services; Health Care & Social Assistance; Other Services; Construction; Mining; Public Administration; Retail Trade; Agriculture, Forestry, Fishing & Hunting; and Information. The two industries reporting contraction in February are: Arts, Entertainment & Recreation; and Accommodation & Food Services.
WHAT RESPONDENTS ARE SAYING...
-- "Lumber-related costs continue to increase as supply is also starting to become a problem. The market volatility of construction materials and the short supply of construction labor have added difficulty to long-term planning." (Construction) -- "Slight increase in activity; beginning to see some higher cost for goods and services." (Finance & Insurance) -- "Overall, [a] very positive outlook. Employment is low, and prices are up." (Health Care & Social Assistance) -- "Price of oil is increasing, which will have a trickle-down effect on our business. As the major oil and gas companies increase their activity, our business will increase with a bit of a lag." (Mining) -- "Class-A driver shortage is causing an escalation in the cost of both inbound and outbound logistics, which is increasing our cost of goods." (Accommodation & Food Services) -- "Optimistic outlook due to GDP and tax breaks, tempered by stock market instability." (Professional, Scientific & Technical Services) -- "Business outlook is picking up momentum due to the state of the stock-market and recent tax breaks. More investment into corporation CapEx funds." (Retail Trade) -- "Domestic transportation is still a challenge with slower than normal transit times. Both intermodal and over-the-road carriers are struggling [with] the electronic data logs (ELDs) now required on all tractors." (Wholesale Trade) -- "Lack of consistent government funding is decreasing spend across the Federal government." (Public Administration) ISM(R) NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM(R) NON-MANUFACTURING AND ISM(R) MANUFACTURING SURVEYS* FEBRUARY 2018 Index Non-Manufacturing Manufacturing Series Series Percent Series Series Index Index Point Rate of Trend** Index Index Percent Point Feb Jan Change Direction Change (Months) Feb Jan Change NMI(R) /PMI(R) 59.5 59.9 -0.4 Growing Slower 97 60.8 59.1 +1.7 Business Activity/ Production 62.8 59.8 +3.0 Growing Faster 103 62.0 64.5 -2.5 New Orders 64.8 62.7 +2.1 Growing Faster 85 64.2 65.4 -1.2 Employment 55.0 61.6 -6.6 Growing Slower 48 59.8 54.2 +5.6 Supplier Deliveries 55.5 55.5 0.0 Slowing Same 26 61.1 59.1 +2.0 From Inventories 53.5 49.0 +4.5 Growing Contracting 1 56.7 52.3 +4.4 Prices 61.0 61.9 -0.9 Increasing Slower 24 74.2 72.7 +1.5 Backlog of Orders 56.0 50.5 +5.5 Growing Faster 2 59.8 56.2 +3.6 New Export Orders 59.5 58.0 +1.5 Growing Faster 13 62.8 59.8 +3.0 From Imports 50.0 54.0 -4.0 Unchanged Growing 1 60.5 58.4 +2.1 Inventory Sentiment 61.0 61.0 0.0 Too High Same 249 N/A N/A N/A Customers' Inventories N/A N/A N/A N/A N/A N/A 43.7 45.6 -1.9 Overall Economy Non-Manufacturing Sector Growing Slower 102 Growing Slower 97
*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 Products (2); Chemical Products (2); Consulting Services; Copper Fittings; Copper Products (7); #1 Diesel Fuel (9); #2 Diesel Fuel (7); Eggs; Freight Charges; Fuel (2); Gasoline (7); Labor; Labor -- Construction (12); Labor -- Temporary; Lumber Products (8); Natural Gas (4); OSB; Paper (3); Polypropylene; PVC Products; Rebar; Steel Products (5); and Transportation Costs (2).
Commodities Down in Price
Chicken Products (2); Office Supplies; and Soybean Oil.
Commodities in Short Supply
Construction Subcontractors (2); IV Solutions (7); Labor (7); Labor -- Construction (23); Labor -- Temporary (6); and Masks for TB/H1N1.
Note: The number of consecutive months the commodity is listed is indicated after each item.
FEBRUARY 2018 NON-MANUFACTURING INDEX SUMMARIES
NMI(R) In February, the NMI(R) registered 59.5 percent, 0.4 percentage point lower than the 59.9 percent registered in January, indicating continued growth in the non-manufacturing sector for the 97th 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 February NMI(R) indicates growth for the 102nd consecutive month in the overall economy, and indicates expansion in the non-manufacturing sector for the 97th consecutive month. Nieves says, "The past relationship between the NMI(R) and the overall economy indicates that the NMI(R) for February (59.5 percent) corresponds to a 3.9 percent increase in real gross domestic product (GDP) on an annualized basis."
Month NMI(R) Month NMI(R) Feb 2018 59.5 Aug 2017 55.2 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 Average for 12 months -- 57.4 High -- 59.9 Low -- 54.3
ISM(R) 's Business Activity Index registered 62.8 percent in February, an increase of 3 percentage points from the January reading of 59.8 percent. This represents growth in business activity for the 103rd consecutive month. Fifteen industries reported increased business activity, and two industries reported decreased activity for the month of February. Comments from respondents include: "Increased consumer confidence" and "Business improving."
The 15 industries reporting growth of business activity in February -- listed in order -- are: Educational Services; Utilities; Transportation & Warehousing; Finance & Insurance; Management of Companies & Support Services; Professional, Scientific & Technical Services; Health Care & Social Assistance; Public Administration; Real Estate, Rental & Leasing; Wholesale Trade; Other Services; Mining; Retail Trade; Construction; and Information. The two industries reporting a decrease in business activity in February are: Arts, Entertainment & Recreation; and Accommodation & Food Services.
Business Activity %Higher %Same %Lower Index Feb 2018 36 51 13 62.8 Jan 2018 31 48 21 59.8 Dec 2017 29 52 19 57.8 Nov 2017 32 57 11 61.1
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March 05, 2018 10:15 ET (15:15 GMT)Copyright (c) 2018 Dow Jones & Company, Inc.