ISM Non-Manufacturing Index
ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index decreased by 2.4 points month on month (-3.7% m/m) to 61.7 in August 2021.
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 60.1, while the backlogs sub-index was high at 61.3.
The 17 services industries reporting growth in August — listed in order — are: Accommodation & Food Services; Retail Trade; Construction; Educational Services; Information; Mining; Other Services; Utilities; Public Administration; Transportation & Warehousing; Health Care & Social Assistance; Wholesale Trade; Management of Companies & Support Services; Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Real Estate, Rental & Leasing; and Professional, Scientific & Technical Services. The only industry to report a decrease is Arts, Entertainment & Recreation.
“Material and labor shortages continue to hinder productivity. Price increases are ever-present and repetitive. Large, multinational manufacturers have had multiple price increases in the last three 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.