ISM Non-Manufacturing Index
ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index increased by 1.3 points month on month (+2.1% m/m) to 64.0 in May 2021.
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 highest this month at 66.2, while the imports sub-index was lowest at 50.4.
The 18 services industries reporting growth in May — listed in order — are: Retail Trade; Wholesale Trade; Construction; Arts, Entertainment & Recreation; Transportation & Warehousing; Real Estate, Rental & Leasing; Mining; Finance & Insurance; Management of Companies & Support Services; Utilities; Other Services; Information; Accommodation & Food Services; Health Care & Social Assistance; Agriculture, Forestry, Fishing & Hunting; Public Administration; Professional, Scientific & Technical Services; and Educational Services.
“We are still busy and adding employees. One of the biggest concerns now is shortages of crucial material and equipment. Metal coils for production are especially scarce. Equipment and material suppliers have been raising prices since the first of the year. We hear of a new increase almost daily.” [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.