ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index decreased by 7.1 points month on month (-10.3% m/m) to 62.0 in December 2021.

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 high this month at 67.6, while the imports sub-index was 55.5.

The 16 services industries reporting growth in December — listed in order — are: Accommodation & Food Services; Wholesale Trade; Construction; Transportation & Warehousing; Management of Companies & Support Services; Retail Trade; Other Services; Health Care & Social Assistance; Arts, Entertainment & Recreation; Utilities; Professional, Scientific & Technical Services; Public Administration; Finance & Insurance; Information; Real Estate, Rental & Leasing; and Educational Services. The only industry reporting contraction in December is Mining.

“The escalation in costs for materials, fuel, labor, lodging and the like continues to negatively impact margins in an unsustainable direction.” [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.