April 4, 2018

March 2018 ISM Non-Manufacturing: 58.8 Percent, Down Slightly From February’s 59.5 Percent

Filed under: Economy — Tom @ 10:07 am

From the Institute for Supply Management (bolds and most paragraph breaks added by me):

Economic activity in the non-manufacturing sector grew in March for the 98th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The NMI® registered 58.8 percent, which is 0.7 percentage point lower than the February reading of 59.5 percent. This represents continued growth in the non-manufacturing sector at a slightly slower rate.

The Non-Manufacturing Business Activity Index decreased to 60.6 percent, 2.2 percentage points lower than the February reading of 62.8 percent, reflecting growth for the 104th consecutive month, at a slower rate in March. The New Orders Index registered 59.5 percent, 5.3 percentage points lower than the reading of 64.8 percent in February.

The Employment Index increased 1.6 percentage points in March to 56.6 percent from the February reading of 55 percent. The Prices Index increased by 0.5 percentage point from the February reading of 61 percent to 61.5 percent, indicating that prices increased in March for the 25th consecutive month.

According to the NMI®, 15 non-manufacturing industries reported growth. Despite the slight dip in the NMI® composite index, the non-manufacturing sector enjoyed another month of strong growth in March. The cooling off of the New Orders Index possibly prevented an even stronger reading for the NMI® composite index. The majority of respondents remain positive about business conditions.

INDUSTRY PERFORMANCE

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

Backlog of Orders (56.5 percent, up slightly from February’s 56.0 percent), remained strong.

This is another “all is well” report, and as with Monday’s Manufacturing Index, it’s probably a good thing that New Orders and Production fell from levels which, if sustained, may have indicated overheating.

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