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 55.9 in May 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 54.5, while the imports sub-index was 52.8.

The 14 services industries reporting growth in May — listed in order — are: Mining; Construction; Real Estate, Rental & Leasing; Educational Services; Transportation & Warehousing; Management of Companies & Support Services; Utilities; Accommodation & Food Services; Wholesale Trade; Professional, Scientific & Technical Services; Arts, Entertainment & Recreation; Other Services; Health Care & Social Assistance; and Public Administration. The three industries reporting a decrease are: Agriculture, Forestry, Fishing & Hunting; Retail Trade; and Information.

“Demand seems to be very high for all of the high-voltage electric products we purchase. Lead times are quadruple what they normally are.” [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.