November 5, 2013

October ISM Non Manufacturing: Up to 55.4% from 54.4%

Filed under: Economy,Taxes & Government — Tom @ 5:10 pm

From the Institute for Supply Management:

Economic activity in the non-manufacturing sector grew in October for the 46th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

“The NMI® registered 55.4 percent in October, 1 percentage point higher than September’s reading of 54.4 percent. This indicates continued growth at a faster rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index increased to 59.7 percent, which is 4.6 percentage points higher than the 55.1 percent reported in September, reflecting growth for the 51st consecutive month. The New Orders Index decreased by 2.8 percentage points to 56.8 percent, and the Employment Index increased 3.5 percentage points to 56.2 percent, indicating growth in employment for the 15th consecutive month. The Prices Index decreased 1.1 percentage points to 56.1 percent, indicating prices increased at a slower rate in October when compared to September. According to the NMI®, 10 non-manufacturing industries reported growth in October. Respondents’ comments are mixed with the majority reflecting an uptick in business. A number of respondents indicate that they are negatively impacted by the government shutdown.”

As seen above, Business Activity was stronger. New Orders was very strong, even if not as strong as September. Backlog of Orders, not listed above, was a breakeven 50% — not good, but not disappointing enough to negate the fact that the report was very strong.

So according to the ISM surveys Manufacuring and Non Manufacturing, the economy was expanding faster across the board in October.

Too bad quite a bit of the hard data disagrees. For one thing, jobs growth has slowed. For another, retail sales have been unimpressive.

I’ll hold my fire for now, but I’m starting believe there’s reason to start doubting the legitimacy of the ISM reports. If there’s a reason, it may have to do with whether or not the survey respondents are representative of the universe of manufacturers and other companies, respectively.

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1 Comment

  1. [...] of the Institute for Supply Management’s surveys (Manufacturing and Non Manufacturing), which had already been showing expansion, improved even further in October, though I’m [...]

    Pingback by BizzyBlog — November 8, 2013 @ 8:12 am

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