ISM Non-Manufacturing Index
ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index decreased by 6.9 points month on month (-12.2% m/m) to 49.6 in December 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 54.7, while the imports sub-index was 52.7.
The 11 services industries reporting growth in December — listed in order — are: Retail Trade; Health Care & Social Assistance; Utilities; Public Administration; Arts, Entertainment & Recreation; Mining; Accommodation & Food Services; Transportation & Warehousing; Management of Companies & Support Services; Professional, Scientific & Technical Services; and Finance & Insurance. The six industries reporting a decrease in the month of December — listed in order — are: Real Estate, Rental & Leasing; Wholesale Trade; Other Services; Information; Construction; and Educational Services.
“Residential new construction continues to be hindered by higher interest rates, slowing sales dramatically. A shift to rental projects seems to be a trend for all builders.” [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.