Tuesday, January 6, 2015

Non-Manufacturing ISM Index Slipped, But Remained in Expansionary Territory

The Non-Manufacturing ISM Report on Business Index was 56.2 in December, 3.1 percentage points lower than the previous month. Index readings above 50 indicate expansion in the non-manufacturing economy. December was the 59th consecutive month of economic growth. Twelve industries reported growth in December, while five industries—Arts, Entertainment & Recreation; Mining; Educational Services; Other Services; and Transportation & Warehousing—contracted. Each component of the index showed slowed growth this month, and two components, Prices and Backlog of Orders, contracted.

The Business Activity Index was 57.2, 7.2 percentage points slower than the previous month. Respondents attributed the growth to “year-end spending prior to new year budget” and “strong foot traffic through retail stores and stand-alone shops.”

The Employment Index was 56.0 in December, 0.7 percentage points lower than the previous month. Survey respondents cite “expansion of business locations” and “employment ramp up” as employment drivers in December.

The New Orders Index was 58.9, 2.5 percentage points slower than November, but still continuing the growth trend for the 64th consecutive month. Respondents reported the continued growth was driven by “expansion in business locations” and “business growth.”

The Supplier Deliveries Index slowed 2.0 percentage points to 52.5. The growth was driven by three industries: Information; Professional, Scientific & Technical Services; and Finance & Insurance.

Read the ISM Release.

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