ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index increased by 2.6 points month on month (+5.3% m/m) to 51.4 in July 2024.

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 54.5, while the imports sub-index was 53.3.

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

“Business is strong in our industry, water treatment. Prices have been fairly flat, but there’s some pressure from increasing costs.” [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.