ISM Non-Manufacturing Index
ISM Non-Manufacturing Index: The Institute of Supply Management’s Non-Manufacturing Index increased by 1.8 points month-over-month, (3.2% m/m,) to 58.7 in January 2021.
The ISM non-manufacturing survey measures the rate and direction of change in activity in nonmanufacturing industries. Surveys are sent to more than 400 purchasing managers in 19 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 is contracting and greater than 50 is expansionary.
Figure 1 breaks down the detail of the composite index and sub-indexes. The composite index score for January was 58.7. One year ago, the composite index was strong at 55.5.
The 14 services industries reporting growth in January — listed in order — are: Real Estate, Rental & Leasing; Construction; Wholesale Trade; Finance & Insurance; Transportation & Warehousing; Health Care & Social Assistance; Management of Companies & Support Services; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Other Services; Mining; Professional, Scientific & Technical Services; Public Administration; and Information. The four industries reporting contraction in January are: Arts, Entertainment & Recreation; Educational Services; Retail Trade; and Utilities.
An Institute for Supply Management respondent stated, “Orders for new business have picked up. Labor is still the major impediment to the business.” (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 US nonmanufacturing economy. We have seen that a strengthening nonmanufacturing economy translates to improved steel consumption.