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 5/3/07 For Apr 2007 | ||||||||||||
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Highlights
The Institute For Supply Management's non-manufacturing index posted a sizable pop higher in April to 56.0, up from a multi-year low of 52.4 in March. New orders showed less strength, 55.5 vs. 53.8, while backlog orders actually showed no month-to-month change, 50.0 vs. a 52.5 reading that indicated growth in March. Note the ISM's headline non-manufacturing index, unlike the ISM's index on the manufacturing side, is not a composite of sub-indexes, a shortcoming that often, like this month, clouds the results.
But employment, up 9 tenths to 51.9 did show improvement in a reading that may firm expectations for tomorrow's monthly employment report. Supply chain readings for inventories and deliveries, like this week's earlier ISM manufacturing data, showed little change. And unlike the manufacturing report, prices paid did not sky rocket, holding at a still very hot 63.5 for a modest 2 tenth gain.
This index had correctly pointed to lower first quarter growth, and today's gain will steady the outlook for future growth. Treasuries slid in reaction to the report while the dollar firmed.
The business activity index from the ISM non-manufacturing survey fell sharply for a second month, to 52.4 in March from 54.3 in February indicating slowing growth. New orders also slipped toward the break even mark. Prices paid jumped to 63.3 from February's 53.8 - primarily due to higher energy costs rather than due to shortages.
Business activity index Consensus Forecast for April 07: 53.5
Range: 50.9 to 55.0
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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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