ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index decreased by 1.2 points month on month (-2.2% m/m) to 52.7 in July 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 57.1, while the imports sub-index was 52.3.

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

“Sales have been steady.” [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.