Global| Aug 04 2004ISM Non-Manufacturing Index Recovered, Employment Index Down Sharply
by:Tom Moeller
|in:Economy in Brief
Summary
The Institute for Supply Management reported that its Business Activity Index for the non-manufacturing sector rose last month to 64.8 versus 59.9 in June. Consensus expectations had been for a lesser rise to 62.0. Since the series' [...]
The Institute for Supply Management reported that its Business Activity Index for the non-manufacturing sector rose last month to 64.8 versus 59.9 in June. Consensus expectations had been for a lesser rise to 62.0.
Since the series' inception in 1997 there has been a 60% correlation between the Business Activity Index and the q/q change in GDP services plus construction.
The new orders index jumped to a record high of 66.4, up 4.0 points from June and up 8.3 points from the 2003 average.
The employment index fell a sharp 7.4 points from the June record to the lowest level since last September. Nevertheless, higher employment was reported by 18% of firms, down from 27% in June but up versus 17% last year.
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 and construction industries.Business activity for the non-manufacturing sector is a question separate from the subgroups mentioned above. In contrast, the NAPM manufacturing sector composite index is a weighted average five components.
The seasonally adjusted prices index slipped to 73.1 from the record high in June.
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.
| ISM Non-manufacturing Survey | July | June | July '03 | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| Business Activity Index | 64.8 | 59.9 | 64.1 | 58.1 | 55.1 | 48.9 |
| Prices Index | 73.1 | 74.6 | 52.6 | 56.7 | 53.9 | 51.5 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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