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 4/4/07 For Mar 2007 | ||||||||||||
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Highlights
The Institute For Supply Management's non-manufacturing index fell back sharply for a second month, at 52.4 in March vs. 54.3 in February indicating slowing growth in the bulk of the nation's economy. New orders, a key sub-index, slipped to 53.8 vs. February's 54.8. Readings above 50 indicate month-to-month growth though current declines reflect falling proportions reporting improvement. Order backlogs were strong, at 52.5 vs. 47.0 in a gain that will help firms to bridge current weakness.
In a gain largely reflecting higher fuel costs, prices paid jumped to 63.3 from February's 53.8. But the short supply list is small, suggesting that price increases are not due to shortages.
Employment slipped back to 50.8 from 52.2 in a result that won't boost expectations for Friday's payroll report. Export orders showed a big decline, down 11.5 percentage points to 48.5. But no more than 20 percent of ISM's non-manufacturing sample are exporters, limiting the importance of this index.
Both ISM reports proved to be on the weak side and raise the prospect that the economy is now slowing below potential. Treasuries firmed in immediate reaction to the report.
The business activity index from the ISM non-manufacturing survey fell sharply to 54.3 in February, from 59.0 in January. However, this index has not been below the breakeven point of 50 since March 2003, then with a level of 46.3.
Business activity index Consensus Forecast for March 07: 55.0
Range: 52.5 to 57.1
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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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