ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index increased by 2.0 points month on month (+3.8% m/m) to 54.1 in December 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 58.2, while the imports sub-index was 50.7.

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

“New residential construction remains hampered by interest rates and affordability issues. Tariff threats from incoming administration have been making suppliers reluctant to hold pricing for more than one year. As projects can take two-plus years, budgeting is getting difficult, similar to 2021 and 2022, when supply chain disruptions caused chaos in pricing.” [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.