Global| Aug 03 2007ISM Nonmanufacturing July Index Below Forecasts
by:Tom Moeller
|in:Economy in Brief
Summary
The non-manufacturing sector Business Activity Index for July fell back to 55.8 from an unrevised 60.7 during the prior month according to the Institute for Supply Management. Since the series' inception in 1997 there has been a 46% [...]
The non-manufacturing sector Business Activity Index for July fell back to 55.8 from an unrevised 60.7 during the prior month according to the Institute for Supply Management.
Since the series' inception in 1997 there has been a 46% correlation between the level of the Business Activity Index and the Q/Q change in real GDP for services plus construction.
The employment sub index also fell to 51.7 from the high of 55.0 in June. 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.
The new orders index also fell m/m to 52.8 from 56.9 in June, down for the second month in a row but the latest still indicates growth in new orders.
Pricing power also slipped for the second month, but by a hard 4.2 points to 61.3, the lowest level since February. Since inception eight years ago, there has been a 70% correlation between the price index and the y/y 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.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 '06 | 2006 | 2005 | 2004 |
|---|---|---|---|---|---|---|
| Business Activity Index | 55.8 | 60.7 | 55.7 | 58.0 | 60.2 | 62.5 |
| Prices Index | 61.3 | 65.5 | 72.1 | 65.2 | 68.0 | 68.8 |
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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