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Economy in Brief

ISM Non-Manufacturing Index Rose
by Tom Moeller December 3, 2004

The November Business Activity Index for the non-manufacturing sector rose to 61.3, adding 1.5 points to the 3.1 point gain in October, according to the Institute for Supply Management. Consensus expectations had been for a modest decline to 58.5.

Since the series' inception in 1997 there has been a 55% correlation between the Business Activity Index and the q/q change in GDP services plus construction.

The employment sub index fell modestly to 55.0 following three months of gain. Since the series' inception in 1997 there has been a 60% 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.

The new orders index fell for the third month in the last four.

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 only to July 1997, therefore its seasonal adjustment should be viewed tentatively.

Business Activity Index for the non-manufacturing sector reflects a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index is a weighted average five components.

ISM Nonmanufacturing Survey Nov Oct Nov '03 2003 2002 2001
Business Activity Index 61.3 59.8 59.6 58.1 55.1 48.9
Prices Index 71.0 74.1 58.1 56.7 53.9 51.5
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