ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index decreased by 1.2 points month on month (-2.3% m/m) to 51.4 in March 2024.

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 business activity sub-index was 57.4, while the imports sub-index was 52.4.

“Twelve industries reported growth in March. The Services PMI®, by being above 50 percent for the 15th consecutive month (after a single month of contraction in December 2022 and a prior 30-month period of expansion), continues to indicate sustained growth — but at a slower rate in March — for the sector.”

“National business conditions remain strong in the industrial construction market. Labor is still tight across the country for skilled trades positions.” [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.