ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index decreased by 1.2 points month on month (2.1% m/m) to 57.1 in April 2022.

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 high this month at 59.1, while the imports sub-index was 52.9.

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

“Mortgage rates have skyrocketed. While relatively low from a historical perspective, the new rates — combined with historically high home prices — will temper new home demand at some point over the next 12 months.” [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.