ISM Non-Manufacturing Index
ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index decreased by 0.1 points month on month (0.2% m/m) to 55.1 in February 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 56.3, while the imports sub-index was 52.6.
The 13 services industries reporting growth in February — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Public Administration; Construction; Professional, Scientific & Technical Services; Retail Trade; Utilities; Other Services; Educational Services; Finance & Insurance; Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Health Care & Social Assistance; and Accommodation & Food Services. The four industries reporting a decrease in the month of February are: Wholesale Trade; Transportation & Warehousing; Information; and Management of Companies & Support Services.
“Activity is steady. Costs continue to escalate, eliminating any profit we had hoped for in the first and second quarters.” [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.