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ISM: US non-manufacturing sector sees growth

Index registered 57.2 percent in December, matching the November figure


January 16, 2017
Purchasing B2B

TEMPE, ARIZONA—United States economic activity in the non-manufacturing sector (NMI) grew last December for the 83rd consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing Report On Business from the Institute for Supply Management.

The report was issued by the Institute for Supply Management (ISM) Non-Manufacturing Business Survey Committee.

“The NMI registered 57.2 percent in December, matching the November figure,” Nieves said. “This represents continued growth in the non-manufacturing sector at the same rate. The Non-Manufacturing Business Activity Index decreased to 61.4 percent, 0.3 percentage point lower than the November reading of 61.7 percent, reflecting growth for the 89th consecutive month, at a slightly slower rate in December.”

INDUSTRY PERFORMANCE
The 12 non-manufacturing industries reporting growth in December listed in order are: Mining; Retail Trade; Finance & Insurance; Information; Arts, Entertainment & Recreation; Construction; Other Services; Health Care & Social Assistance; Professional, Scientific & Technical Services; Utilities; Transportation & Warehousing; and Accommodation & Food Services.

The three industries reporting contraction in December are: Public Administration; Wholesale Trade; and Agriculture, Forestry, Fishing & Hunting.

In December, the NMI registered 57.2 percent, the same reading registered in November, indicating continued growth in the non-manufacturing sector for the 83rd consecutive month. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.

An NMI above 48.9 percent, over a period of time, indicates an expansion of the overall economy. Therefore, the December NMI indicates growth for the 89th consecutive month in the overall economy, and indicates expansion in the non-manufacturing sector for the 83rd consecutive month.

BUSINESS ACTIVITY
ISM’s Business Activity Index in December registered 61.4 percent, a decrease of 0.3 percentage point from the November reading of 61.7 percent. This represents growth in business activity for the 89th consecutive month. Eleven industries reported increased business activity and four industries reported decreased activity for the month of December.

The 11 industries reporting growth of business activity in December are: Arts, Entertainment & Recreation; Retail Trade; Mining; Information; Construction; Utilities; Health Care & Social Assistance; Transportation & Warehousing; Finance & Insurance; Other Services; and Professional, Scientific & Technical Services. The four industries reporting a decrease in business activity in December are: Educational Services; Public Administration; Wholesale Trade; and Accommodation & Food Services.

EMPLOYMENT
Employment activity in the non-manufacturing sector grew in December for the seventh consecutive month. ISM’s Non-Manufacturing Employment Index registered 53.8 percent, which reflects a decrease of 4.4 percentage points when compared to the November reading of 58.2 percent. Nine industries reported increased employment, and four industries reported decreased employment.

SUPPLIER DELIVERIES
Supplier deliveries were slower in December for the 12th consecutive month. The index registered 52 percent, which is the same reading that was registered in November. A reading above 50 percent indicates slower deliveries, while a reading below 50 percent indicates faster deliveries. Comments from respondents include: “More availability of supplier capacity” and “[The] supply chain speeds up during holidays.”

The seven industries reporting slower deliveries in December — listed in order — are: Other Services; Transportation & Warehousing; Professional, Scientific & Technical Services; Wholesale Trade; Health Care & Social Assistance; Information; and Public Administration. The two industries reporting faster deliveries in December are: Retail Trade; and Agriculture, Forestry, Fishing & Hunting. Nine industries reported no change in supplier deliveries in December compared to November.

INVENTORIES
ISM’s Non-Manufacturing Inventories Index grew for the fourth consecutive month and registered 52 percent in December, which is 0.5 percentage point higher than the 51.5 percent that was reported in November. Of the total respondents in December, 32 percent indicated they do not have inventories, or do not measure them.

Orders and requests for services and other non-manufacturing activities to be provided outside of the United States by domestically based personnel grew in December for the fourth consecutive month. The New Export Orders Index for December registered 53 percent, which is 4 percentage points lower than the 57 percent reported in November. Of the total respondents in December, 67 percent indicated they either do not perform, or do not separately measure, orders for work outside of the United States.

Imports were unchanged in December after 10 consecutive months of growth. This month’s reading at 50 percent is 4 percentage points lower than the reading of 54 percent reported in November. Fifty-six percent of respondents reported that they do not use, or do not track the use of, imported materials.