ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index decreased by 3.9 points month on month (-6.1% m/m) to 60.1 in June 2021. The non-manufacturing category reporting the largest monthly growth was Arts, Entertainment & Recreation. 

The ISM non-manufacturing survey measures the rate and direction of change in activity in non-manufacturing industries. Surveys are sent to more than 400 purchasing managers in 18 industries. Survey responses reflect the change in the current month compared with the previous month. A value of 50 is neutral, while less than 50 denotes contracting non-manufacturing activity and greater than 50 denotes expanding activity.

Figure 1 breaks down the composite index and sub-indexes. The employment sub-index was lowest this month at 49.3, while the backlogs sub-index was highest at 65.8.

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

“COVID-19 continues to cause troubles for all of our deliveries, as well as a short supply of a lot of materials. (Shortages of) lumber, copper, and steel continue, which is driving up pricing and lead times.” [Construction]

At Gerdau, we closely monitor the ISM non-manufacturing index since it is an excellent barometer of the present strength, as well as a window on the likely short-run future, of the U.S. non-manufacturing economy. We have seen that a strengthening non-manufacturing economy translates to improved steel consumption.