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Contact:

Kristina Cahill
Report On Business® Analyst
ISM®, ROB/Research Manager
Tempe, Arizona
480-752-6276, Ext. 3015
E-mail: kcahill@instituteforsupplymanagement.org

 


 

September 2018 Non-Manufacturing ISM® Report On Business®

NMI® at 61.6%

Business Activity Index at 65.2%
New Orders Index at 61.6%
Employment Index at 62.4%

(Tempe, Arizona) — Economic activity in the non-manufacturing sector grew in September for the 104th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: “The NMI® registered 61.6 percent, which is 3.1 percentage points higher than the August reading of 58.5 percent. This represents continued growth in the non-manufacturing sector at a faster rate and is an all-time high for the NMI® since the inception of the composite index in 2008. The Non-Manufacturing Business Activity Index increased to 65.2 percent, 4.5 percentage points higher than the August reading of 60.7 percent, reflecting growth for the 110th consecutive month, at a faster rate in September. The New Orders Index registered 61.6 percent, 1.2 percentage points higher than the reading of 60.4 percent in August. The Employment Index increased 5.7 percentage points in September to 62.4 percent from the August reading of 56.7 percent. The Prices Index increased by 1.4 percentage points from the August reading of 62.8 percent to 64.2 percent, indicating that prices increased in September for the 31st consecutive month. According to the NMI®, 17 non-manufacturing industries reported growth. The non-manufacturing sector has had two consecutive months of strong growth since the ‘cooling off’ in July. Overall, respondents remain positive about business conditions and the current and future economy. Concerns remain about capacity, logistics and the uncertainty with global trade.”

INDUSTRY PERFORMANCE The 17 non-manufacturing industries reporting growth in September — listed in order — are: Mining; Real Estate, Rental & Leasing; Wholesale Trade; Management of Companies & Support Services; Construction; Retail Trade; Arts, Entertainment & Recreation; Professional, Scientific & Technical Services; Transportation & Warehousing; Information; Accommodation & Food Services; Health Care & Social Assistance; Public Administration; Other Services; Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; and Utilities. No industry reported a decrease in September.

WHAT RESPONDENTS ARE SAYING

  • “[Additional] logistics costs, both inbound and distribution, caused by increased governmental regulation, and a shortage of class-A drivers is leading to a significant increase in [the] cost of goods [sold].” (Accommodation & Food Services)
  • “New residential construction market is still strong, with a good backlog of orders. Labor shortages and tariffs on materials continue to negatively weigh on earnings.” (Construction)
  • “Economy continues to exhibit strength. New construction, both residential and commercial, abounds. Harvest [is] about over. Overall, results appear promising. Every day is a bit better than the last.” (Finance & Insurance)
  • “Business activity has been slightly higher than normal, though pharmaceutical costs continue to put pressure on profitability.” (Health Care & Social Assistance)
  • “Starting peak holiday season ramp-up, [with] heavy importing. Building inventories of finished goods, replacement parts and supplies. Outlook very positive for [the] holidays and 2019.” (Information)
  • “Business generally remains strong, with new services being implemented.” (Management of Companies & Support Services)
  • “Prices and supply have flattened, and tariff concerns have subsided for our business [at least for the duration of 2018]. Things seems to be stabilizing.” (Mining)
  • “Overall positive outlook in the economy continues, but we are cautious due to limitations in available manpower.” (Professional, Scientific & Technical Services)
  • “Business activity is up sharply due to the rush of purchase requests received prior to fiscal year 2018 funds expiring on September 30.” (Public Administration)
  • “Our general state of business is strong, but there is a lot of uncertainty [about] the pending tariffs. This may cause a shift [in] production sites.” (Retail Trade)
  • “Import tariffs on steel, plywood, and [other] lumber are inflating prices, which are difficult to pass along to the end user due to competitive pressures. Labor and trucking shortages are affecting the industry. Low finished goods inventory is inflating home prices and causing buyers to delay purchases.” (Wholesale Trade)

ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE
COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS*
SEPTEMBER 2018

  Non-Manufacturing Manufacturing
Index Series Index Sep Series Index Aug Percent Point Change Direction Rate of Change Trend** (Months) Series Index Sep Series Index Aug Percent Point Change
NMI®/ PMI® 61.6 58.5 +3.1 Growing Faster 104 59.8 61.3 -1.5
Business Activity/ Production 65.2 60.7 +4.5 Growing Faster 110 63.9 63.3 +0.6
New Orders 61.6 60.4 +1.2 Growing Faster 92 61.8 65.1 -3.3
Employment 62.4 56.7 +5.7 Growing Faster 55 58.8 58.5 +0.3
Supplier Deliveries 57.0 56.0 +1.0 Slowing Faster 33 61.1 64.5 -3.4
Inventories 54.5 53.5 +1.0 Growing Faster 8 53.3 55.4 -2.1
Prices 64.2 62.8 +1.4 Increasing Faster 31 66.9 72.1 -5.2
Backlog of Orders 58.5 56.5 +2.0 Growing Faster 9 55.7 57.5 -1.8
New Export Orders 61.0 60.5 +0.5 Growing Faster 20 56.0 55.2 +0.8
Imports 55.0 52.0 +3.0 Growing Faster 7 54.5 53.9 +0.6
Inventory Sentiment 59.5 59.5 0.0 Too High Same 256 N/A N/A N/A
Customers' Inventories N/A N/A N/A N/A N/A N/A 40.5 41.0 -0.5
Overall Economy Growing Faster 109
Non-Manufacturing Sector Growing Faster 104

Non-Manufacturing ISM® Report On Business® data is seasonally adjusted for the Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries Indexes.
*Number of months moving in current direction.


 

August 2018 Non-Manufacturing ISM® Report On Business®

NMI® at 58.5%

Business Activity Index at 60.7%
New Orders Index at 60.4%
Employment Index at 56.7%

(Tempe, Arizona) – Economic activity in the non-manufacturing sector grew in August for the 103rd consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: “The NMI® registered 58.5 percent, which is 2.8 percentage points higher than the July reading of 55.7 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased to 60.7 percent, 4.2 percentage points higher than the July reading of 56.5 percent, reflecting growth for the 109th consecutive month, at a faster rate in August. The New Orders Index registered 60.4 percent, 3.4 percentage points higher than the reading of 57 percent in July. The Employment Index increased 0.6 percentage point in August to 56.7 percent from the July reading of 56.1 percent. The Prices Index decreased by 0.6 percentage point from the July reading of 63.4 percent to 62.8 percent, indicating that prices increased in August for the 30th consecutive month. According to the NMI®, 16 non-manufacturing industries reported growth. There was a strong rebound for the non-manufacturing sector in August after growth ‘cooled off’ in July. Logistics, tariffs and employment resources continue to have an impact on many of the respective industries. Overall, the respondents remain positive about business conditions and the economy.”

The 16 non-manufacturing industries reporting growth in August — listed in order — are: Construction; Transportation & Warehousing; Retail Trade; Educational Services; Other Services; Real Estate, Rental & Leasing; Public Administration; Management of Companies & Support Services; Wholesale Trade; Mining; Accommodation & Food Services; Health Care & Social Assistance; Finance & Insurance; Utilities; Professional, Scientific & Technical Services; and Information. The only industry reporting a decrease is Agriculture, Forestry, Fishing & Hunting.

WHAT RESPONDENTS ARE SAYING

  • “Tariff-related cost increases are beginning to accelerate, whether tariffs have been put into effect or not.” (Construction)
  • “Our business continues to increase, perhaps linked to the general economy and aging baby boomers.” (Health Care & Social Assistance)
  • “Government tariffs are negatively impacting production and recycling sales. Pulp costs have gone up, and that has directly impacted paper for our newspaper production and copy paper. A 10-percent tariff has been placed on aluminum, [which] is used to make production plates. Those used plates are put on the recycling market, which China has put a tariff on. These dynamics have a significant impact on newspaper margins.” (Information)
  • “Business for August is surprisingly higher for our company compared to last month and YOY [year over year]. Based on current trends on customer quote requests and conversions to orders, we are trending for this month to be the best August in the history of our company.” (Management of Companies & Support Services)
  • “The global tariff war, [with] steel in particular, has driven the cost of goods higher.” (Mining)
  • “Oil and gas hiring continues to increase, particularly in the oil-field services sector. Capital-project activity is strong in the downstream, petrochemical, midstream and onshore drilling sectors. New investment in deepwater drilling projects remains low.” (Professional, Scientific & Technical Services)
  • “Business activity is markedly higher now that the government is in the fourth quarter of its fiscal year and agencies need to obligate their fiscal year 2018 funds. Many contracts expiring in this time frame require renewal.” (Public Administration)
  • “Overall, business has increased. Many factors can be attributed to this increase in demand, [including] the budget and positive outlook on the economy.” (Real Estate, Rental & Leasing)
  • “Solid Q2 results, beating estimates all around. Since we are a services business, the tariffs have little impact [at this point] but are nonetheless a consideration. We do harbor future concerns about the general cost of goods from overseas and the effects on consumer pricing. In the labor market, we have seen a noticeable increase in difficulty to attract and retain talent at all levels. We have begun taking steps to change compensation packages to combat this issue.” (Retail Trade)
  • “Demand for transportation has started earlier than normal with the rail [industry] announcing peak season surcharges that were effective August 1. We are having to re-adjust inventory levels sooner than anticipated.” (Wholesale Trade)

ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE
COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS*
AUGUST 2018

  Non-Manufacturing Manufacturing
Index Series Index Aug Series Index Jul Percent Point Change Direction Rate of Change Trend** (Months) Series Index Aug Series Index Jul Percent Point Change
NMI®/ PMI® 58.5 55.7 +2.8 Growing Faster 103 61.3 58.1 +3.2
Business Activity/ Production 60.7 56.5 +4.2 Growing Faster 109 63.3 58.5 +4.8
New Orders 60.4 57.0 +3.4 Growing Faster 91 65.1 60.2 +4.9
Employment 56.7 56.1 +0.6 Growing Faster 54 58.5 56.5 +2.0
Supplier Deliveries 56.0 53.0 +3.0 Slowing Faster 32 64.5 62.1 +2.4
Inventories 53.5 53.5 0.0 Growing Same 7 55.4 53.3 +2.1
Prices 62.8 63.4 -0.6 Increasing Slower 30 72.1 73.2 -1.1
Backlog of Orders 56.5 51.5 +5.0 Growing Faster 8 57.5 54.7 +2.8
New Export Orders 60.5 58.0 +2.5 Growing Faster 19 55.2 55.3 -0.1
Imports 52.0 52.5 -0.5 Growing Slower 6 53.9 54.7 -0.8
Inventory Sentiment 59.5 58.0 +1.5 Too High Faster 255 N/A N/A N/A
Customers' Inventories N/A N/A N/A N/A N/A N/A 41.0 39.4 +1.6
Overall Economy Growing Faster 108
Non-Manufacturing Sector Growing Faster 103

*Non-Manufacturing ISM® Report On Business® data is seasonally adjusted for the Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries Indexes.

**Number of months moving in current direction.


 

July 2018 Non-Manufacturing ISM® Report On Business®

NMI® at 55.7%

Business Activity Index at 56.5%
New Orders Index at 57.0%
Employment Index at 56.1%

(Tempe, Arizona) – Economic activity in the non-manufacturing sector grew in July for the 102nd consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: “The NMI® registered 55.7 percent, which is 3.4 percentage points lower than the June reading of 59.1 percent. This represents continued growth in the non-manufacturing sector at a slower rate. There was a notable decrease in the Business Activity Index, which fell to 56.5 percent, 7.4 percentage points lower than the June reading of 63.9 percent. The July figure still reflects growth for the 108th consecutive month, at a slower rate. The New Orders Index registered 57 percent, 6.2 percentage points lower than the reading of 63.2 percent in June. The Employment Index increased 2.5 percentage points in July to 56.1 percent from the June reading of 53.6 percent. The Prices Index increased by 2.7 percentage points from the June reading of 60.7 percent to 63.4 percent, indicating that prices increased in July for the 29th consecutive month. According to the NMI®, 16 non-manufacturing industries reported growth. There has been a ‘cooling off’ in growth for the non-manufacturing sector. Tariffs and deliveries are an ongoing concern. The majority of respondents remain positive about business conditions and the economy.”

INDUSTRY PERFORMANCE

The 16 non-manufacturing industries reporting growth in July — listed in order — are: Mining; Public Administration; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Other Services; Construction; Real Estate, Rental & Leasing; Transportation & Warehousing; Finance & Insurance; Retail Trade; Wholesale Trade; Arts, Entertainment & Recreation; Information; Utilities; Health Care & Social Assistance; and Management of Companies & Support Services. The two industries reporting a decrease are: Educational Services; and Professional, Scientific & Technical Services.

WHAT RESPONDENTS ARE SAYING

  • “Business is strong in both our commercial-construction and residential-service areas.” (Construction)
  • “Current local and national conditions are good. On track to meet goals and projections for 2018.” (Finance & Insurance)
  • “There has been little change in business activity, despite all of the political turmoil. Patients get sick regardless of what is going on in the economy.” (Health Care & Social Assistance)
  • “Vendors continue to report that they are seeing significant increases in order volume this year. They report having to hire more staff to keep up with the increase in orders.” (Management of Companies & Support Services)
  • “Tariffs continue to make steel pricing volatile. Crude oil has trended over (US)$70 a barrel, which provides a bullish outlook for the duration of 2018.” (Mining)
  • “The improving U.S. economy is having a positive impact on our sales growth in all business sectors, with oil and gas taking the lead.” (Other Services)
  • “Generally optimistic. High labor-participation rates, but a GDP (gross domestic product) forecast of about 4 percent is tempered by tariff issues with China and the European Union.” (Professional, Scientific & Technical Services)
  • “Expanding concerns with price increases due to tariff and global trade policy changes and uncertainty. Receiving more requests from suppliers for price increases due to changes in the costs of steel, aluminum and the like.” (Public Administration)
  • “Business is up overall, but a lot of questions loom over the rest of the year. These include concerns about international markets and the increasing tariffs that impact the landed costs of goods.” (Retail Trade)
  • “Import tariffs on wood and steel. Shortages of rail cars, truck drivers and skilled labor. High-priced construction materials.” (Wholesale Trade)

ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE
COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS*
JULY 2018

  Non-Manufacturing Manufacturing
Index Series
Index
Jul
Series
Index
Jun
Percent
Point
Change
Direction Rate
of
Change
Trend**
(Months)
Series
Index
Jul
Series
Index
Jun
Percent
Point
Change
NMI®/PMI® 55.7 59.1 -3.4 Growing Slower 102 58.1 60.2 -2.1
Business Activity/Production 56.5 63.9 -7.4 Growing Slower 108 58.5 62.3 -3.8
New Orders 57.0 63.2 -6.2 Growing Slower 90 60.2 63.5 -3.3
Employment 56.1 53.6 +2.5 Growing Faster 53 56.5 56.0 +0.5
Supplier Deliveries 53.0 55.5 -2.5 Slowing Slower 31 62.1 68.2 -6.1
Inventories 53.5 53.5 0.0 Growing Same 6 53.3 50.8 +2.5
Prices 63.4 60.7 +2.7 Increasing Faster 29 73.2 76.8 -3.6
Backlog of Orders 51.5 56.5 -5.0 Growing Slower 7 54.7 60.1 -5.4
New Export Orders 58.0 60.5 -2.5 Growing Slower 18 55.3 56.3 -1.0
Imports 52.5 51.5 +1.0 Growing Faster 5 54.7 59.0 -4.3
Inventory Sentiment 58.0 57.5 +0.5 Too High Faster 254 N/A N/A N/A
Customers' Inventories N/A N/A N/A N/A N/A N/A 39.4 39.7 -0.3
Overall Economy Growing Slower 107
Non-Manufacturing Sector Growing Slower 102

*Non-Manufacturing ISM® Report On Business® data is seasonally adjusted for the Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.

**Number of months moving in current direction.


 

June 2018 Non-Manufacturing ISM® Report On Business®

NMI® at 59.1%

Business Activity Index at 63.9%
New Orders Index at 63.2%

Employment Index at 53.6%

(Tempe, Arizona) — Economic activity in the non-manufacturing sector grew in June for the 101st consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: “The NMI® registered 59.1 percent, which is 0.5 percentage point higher than the May reading of 58.6 percent. This represents continued growth in the non-manufacturing sector at a slightly faster rate. The Non-Manufacturing Business Activity Index increased to 63.9 percent, 2.6 percentage points higher than the May reading of 61.3 percent, reflecting growth for the 107th consecutive month, at a faster rate in June. The New Orders Index registered 63.2 percent, 2.7 percentage points higher than the reading of 60.5 percent in May. The Employment Index decreased 0.5 percentage point in June to 53.6 percent from the May reading of 54.1 percent. The Prices Index decreased by 3.6 percentage points from the May reading of 64.3 percent to 60.7 percent, indicating that prices increased in June for the 28th consecutive month. According to the NMI®, 17 non-manufacturing industries reported growth. Respondents continue to be optimistic about business conditions and the overall economy. There is a continuing concern relating to tariffs, capacity constraints and delivery.”

INDUSTRY PERFORMANCE

The 17 non-manufacturing industries reported growth in June — listed in order — are: Mining; Construction; Wholesale Trade; Retail Trade; Public Administration; Educational Services; Real Estate, Rental & Leasing; Management of Companies & Support Services; Transportation & Warehousing; Health Care & Social Assistance; Utilities; Finance & Insurance; Arts, Entertainment & Recreation; Other Services; Professional, Scientific & Technical Services; Information; and Accommodation & Food Services. The only industry reporting a decrease is Agriculture, Forestry, Fishing & Hunting.

WHAT RESPONDENTS ARE SAYING

  • “Tariffs, freight [issues] and labor shortages continue to have an inflationary influence on costs.” (Construction)
  • “Positive outlook — business activity on the uptick.” (Finance & Insurance)
  • “Shortage of IV solutions and drugs continues to be an issue.” (Health Care & Social Assistance)
  • “Crude prices are causing concern, as it is a driver in newsprint inks. Tariffs on paper and aluminum are causing apprehension about future pricing. Suppliers are posturing and threatening price increases, and we are doing our best to reject increases.” (Information)
  • “Trade tariffs are creating price uncertainty.” (Management of Companies & Support Services)
  • “Domestically, we are still experiencing a shortage of transportation providers that is getting worse each month when retiring drivers or drivers moving into other opportunities are not being replaced. Internationally, there is a shortage of flat racks [that] has caused late shipments. The tariffs on steel and aluminum have also had some negative effects on our supply of material, but we have applied for exemptions.” (Other Services)
  • “Oil price stabilization has led to increased hiring in some sectors of the industry, as well as a small increase in major capital projects for offshore drilling companies. Oil-field services hiring continues to be strong, as does hiring and capital spending in the petrochemical and downstream sectors of the industry.” (Professional, Scientific & Technical Services)
  • “Commodity prices [are] increasing due to demand and transportation costs.” (Public Administration)
  • “Sales have remained strong and are continuing to increase. Currently, we are on pace for a top-line record. The bottom line is more flat, as we have been fighting commodity cost increases and exchange-rate variances throughout the first half of 2018.” (Retail Trade)
  • “Wire sales improve as contractors ramp up with the rise in copper. We’re seeing ongoing price increases in nearly all commodities due to higher freight expenses by manufacturers and shortage of truck drivers.” (Wholesale Trade)

ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE
COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS*
JUNE 2018

  Non-Manufacturing Manufacturing
Index Series
Index
Jun
Series
Index
May
Percent
Point
Change
Direction Rate
of
Change
Trend**
(Months)
Series
Index
Jun
Series
Index
May
Percent
Point
Change
NMI®/PMI® 59.1 58.6 +0.5 Growing Faster 101 60.2 58.7 +1.5
Business Activity/Production 63.9 61.3 +2.6 Growing Faster 107 62.3 61.5 +0.8
New Orders 63.2 60.5 +2.7 Growing Faster 89 63.5 63.7 -0.2
Employment 53.6 54.1 -0.5 Growing Slower 52 56.0 56.3 -0.3
Supplier Deliveries 55.5 58.5 -3.0 Slowing Slower 30 68.2 62.0 +6.2
Inventories 53.5 57.5 -4.0 Growing Slower 5 50.8 50.2 +0.6
Prices 60.7 64.3 -3.6 Increasing Slower 28 76.8 79.5 -2.7
Backlog of Orders 56.5 60.5 -4.0 Growing Slower 6 60.1 63.5 -3.4
New Export Orders 60.5 57.5 +3.0 Growing Faster 17 56.3 55.6 +0.7
Imports 51.5 54.0 -2.5 Growing Slower 4 59.0 54.1 +4.9
Inventory Sentiment 57.5 61.0 -3.5 Too High Slower 253 N/A N/A N/A
Customers' Inventories N/A N/A N/A N/A N/A N/A 39.7 39.6 +0.1
Overall Economy Growing Faster 106
Non-Manufacturing Sector Growing Faster 101

*Non-Manufacturing ISM® Report On Business® data is seasonally adjusted for the Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.

**Number of months moving in current direction.


 

May 2018 Non-Manufacturing ISM® Report On Business®

NMI® at 58.6%

Business Activity Index at 61.3%
New Orders Index at 60.5%
Employment Index at 54.1%

(Tempe, Arizona) — Economic activity in the non-manufacturing sector grew in May for the 100th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: “The NMI® registered 58.6 percent, which is 1.8 percentage points higher than the April reading of 56.8 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased to 61.3 percent, 2.2 percentage points higher than the April reading of 59.1 percent, reflecting growth for the 106th consecutive month, at a faster rate in May. The New Orders Index registered 60.5 percent, 0.5 percentage point higher than the reading of 60 percent in April. The Employment Index increased 0.5 percentage point in May to 54.1 percent from the April reading of 53.6 percent. The Prices Index increased by 2.5 percentage points from the April reading of 61.8 percent to 64.3 percent, indicating that prices increased in May for the 27th consecutive month. According to the NMI®, 14 non-manufacturing industries reported growth. The majority of respondents are optimistic about business conditions and the overall economy. There continue to be concerns about the uncertainty surrounding tariffs, trade agreements and the impact on cost of goods sold.”

INDUSTRY PERFORMANCE

The 14 non-manufacturing industries reported growth in May — listed in order — are: Wholesale Trade; Mining; Real Estate, Rental & Leasing; Construction; Retail Trade; Management of Companies & Support Services; Professional, Scientific & Technical Services; Transportation & Warehousing; Public Administration; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Finance & Insurance; Utilities; and Other Services. The only industry reporting a decrease is Information.

WHAT RESPONDENTS ARE SAYING

  • “Since the last report, our foil lid supplier stated that the tariff on aluminum has caused supply interruptions and higher costs. A price increase was instituted by the supplier.” (Agriculture, Forestry, Fishing & Hunting)
  • “Material prices have been difficult to predict this year, and suppliers have struggled to hold prices for any extended period on quotes, specifically on lumber and lumber-related products. The instability has proven frustrating, but a larger problem is that we are starting to see longer lead times in many of the same areas that could start impacting timelines if they continue to get worse as we get into the main building season.” (Construction)
  • “After a challenging 2017 that ended strong, 2018 is off to a good start. Volume from existing clients as well as new sales are up, although the growth is marginal. May is showing a continuation of the monthly growth when measured over [the] previous year, leading to optimism for the rest of 2018.” (Management of Companies & Support Services)
  • “The trade discussions with NAFTA, Korea and the European Union will have critical impacts on our spend relating to steel products. Also, the potential of the U.S. pulling out of the Iran nuclear deal could push crude prices higher.” (Mining)
  • “Business is starting to increase. We have spent two years reducing our inventories to a level to support the current business climate. Now the uptick is faster than anticipated and supply is out of alignment with demand, which is causing many stockouts and shortages, and the need to expedite inventory. In shipping, we still [are] experiencing a shortage of domestic trucking resources (especially flat beds) and international shortage of flat racks. We [are] working to minimize the impact of the tariff on steel and aluminum.” (Other Services)
  • “Oil price stabilization in the (US) $60 to $70 per barrel [is] having a positive impact on hiring, both contract labor and direct employees, in the oil and gas industry and supporting industries.” (Professional, Scientific & Technical Services)
  • “Shortage of qualified labor and services personnel.” (Public Administration)
  • “Sales over the last month have been very strong. We are still struggling with the fluctuation in commodity costs and the weakening U.S. dollar.” (Retail Trade)
  • “The supply chain is shuttering because of a lack of drivers and equipment causing delays in multiple modes of transportation. The activity to adjust to this is not causing stockouts yet, and we are increasing inventory levels in anticipation of worsening conditions.” (Wholesale Trade)

ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE
COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS*
MAY 2018

  Non-Manufacturing Manufacturing
Index Series
Index
May
Series
Index
Apr
Percent
Point
Change
Direction Rate
of
Change
Trend**
(Months)
Series
Index
May
Series
Index
Apr
Percent
Point
Change
NMI®/PMI® 58.6 56.8 +1.8 Growing Faster 100 58.7 57.3 +1.4
Business Activity/Production 61.3 59.1 +2.2 Growing Faster 106 61.5 57.2 +4.3
New Orders 60.5 60.0 +0.5 Growing Faster 88 63.7 61.2 +2.5
Employment 54.1 53.6 +0.5 Growing Faster 51 56.3 54.2 +2.1
Supplier Deliveries 58.5 54.5 +4.0 Slowing Faster 29 62.0 61.1 +0.9
Inventories 57.5 57.0 +0.5 Growing Faster 4 50.2 52.9 -2.7
Prices 64.3 61.8 +2.5 Increasing Faster 27 79.5 79.3 -0.2
Backlog of Orders 60.5 52.0 +8.5 Growing Faster 5 63.5 62.0 +1.5
New Export Orders 57.5 61.5 -4.0 Growing Slower 16 55.6 57.7 -2.1
Imports 54.0 54.5 -0.5 Growing Slower 3 54.1 57.8 -3.7
Inventory Sentiment 61.0 60.0 +1.0 Too High Faster 252 N/A N/A N/A
Customers' Inventories N/A N/A N/A N/A N/A N/A 39.6 44.3 -4.7
Overall Economy Growing Faster 105
Non-Manufacturing Sector Growing Faster 100

*Non-Manufacturing ISM® Report On Business® data is seasonally adjusted for the Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.

**Number of months moving in current direction.


 

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