ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index increased by 1.8 points month on month (+3.4% m/m) to 54.5 in August 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 57.3, while the imports sub-index was 52.3.

The 13 services industries reporting growth in August — listed in order — are: Real Estate, Rental & Leasing; Accommodation & Food Services; Other Services; Arts, Entertainment & Recreation; Utilities; Retail Trade; Public Administration; Information; Educational Services; Construction; Finance & Insurance; Transportation & Warehousing; and Professional, Scientific & Technical Services. The five industries reporting a decrease in the month of August are: Agriculture, Forestry, Fishing & Hunting; Mining; Wholesale Trade; Health Care & Social Assistance; and Management of Companies & Support Services.

“Sales on a national level have been strong. Commodity material prices remain stable, and we are finding areas for cost reductions. Material availability has returned to pre-COVID-19 levels.” [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.