The non-manufacturing ISM surveys nearly 400 firms from 60 sectors across the United States, including agriculture, mining, construction, transportation, communications, wholesale trade and retail trade. Financial market players monitor the business activity index, because a composite index, like its manufacturing cousin, is not compiled by the ISM. Why Investors Care
| Released on 1/4/07 For Dec 2006 | ||||||||||||
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Highlights
The ISM's non-manufacturing index showed continued solid growth in December but at a slightly slower pace, at 57.1 vs. 58.9 in November. But order data may point to slowing rates of business activity ahead as new orders dipped 2.7 percentage points to a still respectable 54.4 while backlog orders plunged 6.5 points to 48.0.
The employment index was an area of strength, rising 1.7 percentage points to 53.3 in a reading that may ease doubts over the strength of tomorrow's employment report. Prices paid, in contrast to yesterday's ISM report on the manufacturing side, showed increasing pressure, at 59.1 vs. November's 55.6.
Readings on the supply chain were mixed with supplier deliveries little changed at 51.0 but inventories showing an increase to 53.5 vs. 51.5. Should order growth in fact slow, non-manufacturers may have to work to stem further inventory build.
Treasuries firmed in reaction perhaps to the main headline and the order data, though the rise in prices may limit further gains. The dollar slipped on the report, one that is not likely to help the stock market.
The business activity index from the ISM non-manufacturing survey rose to 58.9 in November from 57.1 in October. The report showed improvement in new orders, backlogs, and in employment.
Business activity index Consensus Forecast for December 06: 58.0
Range: 57.0 to 58.5
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The ISM non-manufacturing survey does not compile a composite index like its manufacturing cousin. The business activity index, which is actually akin to the production index in the manufacturing survey, is widely followed as the key figure from this survey. |
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