NMI® at 60.7%Business Activity Index at 65.2%New Orders Index at 62.5%Employment Index at 58.4%
(Tempe, Arizona) – Economic activity in the non-manufacturing sector grew in November for the 106th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.
The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: “The NMI® registered 60.7 percent, which is 0.4 percentage point higher than the October reading of 60.3 percent. This represents continued growth in the non-manufacturing sector, at a slightly faster rate. The Non-Manufacturing Business Activity Index increased to 65.2 percent, 2.7 percentage points higher than the October reading of 62.5 percent, reflecting growth for the 112th consecutive month, at a faster rate in November. The New Orders Index registered 62.5 percent, 1 percentage point higher than the reading of 61.5 percent in October. The Employment Index decreased 1.3 percentage points in November to 58.4 percent from the October reading of 59.7 percent. The Prices Index rose 2.6 percentage points from the October reading of 61.7 percent to 64.3 percent, indicating that prices increased in November for the 33rd consecutive month. According to the NMI®, 17 non-manufacturing industries reported growth. The non-manufacturing sector continued to reflect strong growth in November. However, concerns persist about employment resources and the impact of tariffs. Respondents remain positive about current business conditions and the direction of the economy.”
The 17 non-manufacturing industries reporting growth in November — listed in order — are: Educational Services; Professional, Scientific & Technical Services; Health Care & Social Assistance; Transportation & Warehousing; Construction; Wholesale Trade; Real Estate, Rental & Leasing; Management of Companies & Support Services; Information; Finance & Insurance; Retail Trade; Other Services; Mining; Accommodation & Food Services; Public Administration; Arts, Entertainment & Recreation; and Utilities. The only industry reporting a decrease in November is Agriculture, Forestry, Fishing & Hunting.
WHAT RESPONDENTS ARE SAYING“Relatively stable business conditions. Input costs are corn- and soy-based, so the ongoing trade dispute with China presents challenges and opportunities. The chief dilemmas are: When will the dispute be resolved, and what will the market reaction be?” (Agriculture, Forestry, Fishing & Hunting)“Commercial construction is strong. Employment is struggling due to lack of qualified talent.” (Construction)“Midway through Q4, and on track for another good year. Conditions are favorable and look to remain so going into 2019.” (Finance & Insurance)“Business is booming. Labor costs are rising.” (Information)“November continues our busy season, at a higher rate than we anticipated. Both internal and supplier resources have had success gaining some ground back on backlog of orders. A large volume of orders is always expected this time of year, but this year, it has been busier than our organization and suppliers anticipated.” (Management of Companies & Support Services)“Business continues to improve internationally, but there is a slowdown in domestics offshore and leveling in domestic onshore, which directly affects our business. There are concerns about domestic trucking and international flat rack availability. There is also discussion of implementation of trucking e-log requirements in Mexico sometime in 2019 or 2020. That could affect our trucking providers’ lead time for delivery-support services in the Mexican region.” (Other Services)“The imposition of and threats to impose tariffs are having a negative effect on several capital-improvement projects in progress. The contractors have submitted change order requests for those items impacted, especially those with a steel component. The increases are not expected or budgeted for.” (Public Administration“The business is preparing for the later phases of tariffs by slowing down growth and capital investment until the future becomes clearer. We are starting to pull months of inventory in before the next round of tariffs hit, so there is a lot of activity on our logistics side.” (Retail Trade)“We are still experiencing low service levels with transportation.” (Wholesale Trade)ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS*November 2018 Non-ManufacturingManufacturingIndexSeries Index NovSeries Index OctPercent Point ChangeDirectionRate of ChangeTrend** (Months)Series Index NovSeries Index OctPercent Point ChangeNMI®/ PMI®60.760.3+0.4GrowingFaster10659.357.7+1.6Business Activity/ Production65.262.5+2.7GrowingFaster11260.659.9+0.7New Orders62.561.5+1.0GrowingFaster9462.157.4+4.7Employment58.459.7-1.3GrowingSlower5758.456.8+1.6Supplier Deliveries56.557.5-1.0SlowingSlower3562.563.8-1.3Inventories57.556.0+1.5GrowingFaster1052.950.7+2.2Prices64.361.7+2.6IncreasingFaster3360.771.6-10.9Backlog of Orders55.553.5+2.0GrowingFaster1156.455.8+0.6New Export Orders57.561.0-3.5GrowingSlower2252.252.20.0Imports54.551.0+3.5GrowingFaster953.654.3-0.7Inventory Sentiment60.062.0-2.0Too HighSlower258N/AN/AN/ACustomers' InventoriesN/AN/AN/AN/AN/AN/A41.543.3-1.8Overall EconomyGrowingFaster111Non-Manufacturing SectorGrowingFaster106Non-Manufacturing ISM®Report On Business® data is seasonally adjusted for the Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM® Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries Indexes.*Number of months moving in current direction.Commodities reported up/down in price and in short supplyCommodities Up in Price
Aluminum (8); Labor (2); Labor — Construction; Medical Supplies; Paper (4); Steel Products (14); and Tomatoes.
Commodities Down in Price
Cheese; Fuel; Gasoline; Lumber (2); and Lumber Products.