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Economy in Brief
NABE Projects Firm Growth in 2022, as in 2021
The NABE expects 4.0% real GDP growth in 2022 following a 4.8% rise during 2021...
U.S. Construction Spending Strengthens Again in January
Building activity continues to strengthen...
Manufacturing PMIs Are Strengthening More in the Developed World
PMIs largely are improving in February...
U.S. Personal Income & Spending Surge With Stimulus Payments in January
Personal income jumped 10.0% (13.1% y/y) last month...
Chicago Business Barometer Declines Sharply in February
The ISM-Chicago Purchasing Managers Business Barometer fell 4.3 points in February to 59.5...
Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller August 3, 2005
The July Business Activity Index for the non-manufacturing sector reversed about half of the prior month's improvement and fell 1.7 points to 60.5, reported the Institute for Supply Management. Consensus expectations had been for a decline to 61.
Since the series' inception in 1997 there has been a 50% correlation between the Business Activity Index and the q/q change in real GDP for services plus construction.
A employment index reversed just a piece of the June improvement and fell to a still firm 56.2. 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.
Moving the other way, the index of new orders jumped 2.4 points to 61.9, the highest level since March. Pricing power also surged. A 10.5 point gain m/m raised the index level to the highest level of this year (70.3).
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 | July | June | July '04 | 2004 | 2003 | 2002 |
---|---|---|---|---|---|---|
Business Activity Index | 60.5 | 62.2 | 63.4 | 62.4 | 58.2 | 55.1 |
Prices Index | 70.3 | 59.8 | 72.4 | 69.0 | 56.8 | 54.0 |