ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index increased by 6.0 points month on month (12.2% m/m) to 55.2 in January 2023.

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 60.4, while the imports sub-index was 53.0.

The 10 services industries reporting growth in January — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Utilities; Other Services; Management of Companies & Support Services; Public Administration; Educational Services; Accommodation & Food Services; Real Estate, Rental & Leasing; Health Care & Social Assistance; and Professional, Scientific & Technical Services. The eight industries reporting a decrease in the month of January — listed in order — are: Transportation & Warehousing; Retail Trade; Arts, Entertainment & Recreation; Mining; Construction; Information; Finance & Insurance; and Wholesale Trade.

“New residential housing market is still reeling from mortgage rate increases. Sales have fallen off dramatically at entry-level price points, as costs are trending flat.” [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.