Global| Jun 03 2015U.S. ISM Nonmanufacturing Index Deteriorates Sharply
by:Tom Moeller
|in:Economy in Brief
Summary
The Institute for Supply Management (ISM) Composite Index of Nonmanufacturing Sector Business declined to 55.7 during May from an unrevised 57.8 in April. The latest figure was the lowest since April of last year and fell short of [...]
The Institute for Supply Management (ISM) Composite Index of Nonmanufacturing Sector Business declined to 55.7 during May from an unrevised 57.8 in April. The latest figure was the lowest since April of last year and fell short of expectations for 57.0 in the Action Economics Forecast Survey.
Haver Analytics constructs a Composite Index using the nonmanufacturing ISM index and the ISM factory sector measure, released Monday. It fell sharply to 55.3, also the lowest level since last April. During the last ten years, there has been a 72% correlation between the index and the q/q change in real GDP.
Deterioration last month spread across the component series, led by a collapse in the supplier delivery index to 50.0. It showed the quickest delivery speeds in a year. The business activity reading of 59.5 was at its lowest point in three months. The new orders series fell modestly to 57.9. The employment index (55.3) deteriorated to its lowest point since January. During the last ten years, there has been an 88% correlation between the employment index and the m/m change in service plus construction payrolls.
The prices paid series improved to its highest point in nine months. Twenty percent (NSA) of respondents paid higher prices, a nine month high. Seven paid lower prices, the least since July.
The ISM data are available in Haver's USECON database. The expectations figure from Action Economics is in the AS1REPNA database.
| ISM Nonmanufacturing Survey (SA) | May | Apr | Mar | May'14 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Composite Diffusion Index | 55.7 | 57.8 | 56.5 | 56.1 | 56.3 | 54.6 | 54.6 |
| Business Activity | 59.5 | 61.6 | 57.5 | 61.1 | 59.7 | 56.7 | 57.6 |
| New Orders | 57.9 | 59.2 | 57.8 | 59.9 | 58.6 | 55.8 | 56.5 |
| Employment | 55.3 | 56.7 | 56.6 | 53.2 | 54.9 | 54.3 | 53.5 |
| Supplier Deliveries (NSA) | 50.0 | 53.5 | 54.0 | 50.0 | 51.8 | 51.7 | 50.6 |
| Prices Index | 55.9 | 50.1 | 52.4 | 60.2 | 56.8 | 55.6 | 59.3 |
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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