· According
to the Institute for Supply Management, the November Business Activity
Index for the non-manufacturing sector slipped to 54.1 from 55.8. A
figure above 50 indicates rising activity and the m/m decline somewhat
outpaced Consensus expectations for a lesser fall.
· Since the series' inception in 1997 there has been a 44% correlation between the level of the Business Activity Index in the non-manufacturing sector and the Q/Q change in real GDP for the services and the construction sectors. The correlation of the factory sector ISM index with the change in real GDP less just services is a higher 57%, though over the last ten years it only has been 34%.
· The new orders sub index of the Business Activity fell sharply to 51.1 from 55.7. The latest was the lowest reading since early 2003.
· The employment sub index similarly fell to 50.8, just barely suggesting rising employment. Since the series' inception in 1997 there has been a 56% correlation between the level of the ISM non-manufacturing employment index and the m/m change in payroll employment in the service producing plus the construction industries.
· Pricing power surged m/m to its
highest level since 2005. Since inception ten years ago, there has been
a 60% correlation between the price index and the q/q change in the GDP
services chain price index.
· ISM surveys more than 370 purchasing managers in more than 62 industries including construction, law firms, hospitals, government and retailers. The non-manufacturing survey dates back to July 1997.
· The Business Activity Index for the non-manufacturing sector reflects a question separate from the subgroups mentioned above. In contrast, the ISM manufacturing sector composite index is a weighted average of five components.