Global| Apr 06 2015U.S. ISM Nonmanufacturing Index Slips
by:Tom Moeller
|in:Economy in Brief
Summary
The Institute for Supply Management (ISM) Composite Index of Nonmanufacturing Sector Activity fell to 56.5 during March from an unrevised 56.9 in February. These numbers remained well below the highs of the second half of 2014. The [...]
The Institute for Supply Management (ISM) Composite Index of Nonmanufacturing Sector Activity fell to 56.5 during March from an unrevised 56.9 in February. These numbers remained well below the highs of the second half of 2014. The latest figure matched expectations in the Action Economics Forecast Survey.
Haver Analytics constructs a Composite Index using the nonmanufacturing ISM index and the ISM factory sector measure, released Wednesday. It fell to 55.9, the lowest level since last April. During the last ten years, there has been a 74% correlation between the index and the q/q change in real GDP.
The slip last month in the nonmanufacturing composite index reflected a sharp decline in the business activity reading to 57.5, the lowest point in twelve months. The supplier delivery (54.0) index also reversed its February gain, but the recent upward trend in the index indicates slowing delivery speeds. The new orders reading (57.8) recovered some of the prior month's decline while the employment index notched slightly higher to 56.6, its highest level since October. 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 rose to 52.4, indicating rising prices, on balance, for the first time since November. A higher 21% of respondents paid higher prices, though that still was down from the 2011 high of 57%. A lessened 9% paid lower prices, the least in six months.
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) | Mar | Feb | Jan | Mar'14 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Composite Diffusion Index | 56.5 | 56.9 | 56.7 | 53.7 | 56.3 | 54.6 | 54.6 |
| Business Activity | 57.5 | 59.4 | 61.5 | 54.2 | 59.7 | 56.7 | 57.6 |
| New Orders | 57.8 | 56.7 | 59.5 | 54.8 | 58.6 | 55.8 | 56.5 |
| Employment | 56.6 | 56.4 | 51.6 | 53.7 | 54.9 | 54.3 | 53.5 |
| Supplier Deliveries (NSA) | 54.0 | 55.0 | 54.0 | 52.0 | 51.8 | 51.7 | 50.6 |
| Prices Index | 52.4 | 49.7 | 45.5 | 58.1 | 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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