Global| Jan 05 2005ISM Non-Manufacturing Index Up Again
by:Tom Moeller
|in:Economy in Brief
Summary
The Business Activity Index for the non-manufacturing sector rose last month for the third straight period to 63.1 from 61.3 in November according to the Institute for Supply Management. Consensus expectations had been for little [...]
The Business Activity Index for the non-manufacturing sector rose last month for the third straight period to 63.1 from 61.3 in November according to the Institute for Supply Management. Consensus expectations had been for little change at 61.0.
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 new orders index recovered most of the prior month's slight decline but at 60.3 remained well off the July high of 66.4.
The employment sub index was about unchanged at 54.9 which also is down from the high of 57.4 set in June. 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.
Pricing power remained firm as indicated by the rise in the price index to 71.4, though the index has varied in a range between 67 and 74 since the spring.
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 | Dec | Nov | Dec '03 | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Business Activity Index | 63.1 | 61.3 | 58.0 | 62.5 | 58.1 | 55.1 |
| Prices Index | 71.4 | 71.0 | 60.3 | 68.9 | 56.7 | 53.9 |
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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