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 11/5/07 For Oct 2007 | ||||||||||||
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Highlights
The Institute For Supply Management's non-manufacturing index rose to a very solid 55.8 in October vs. 54.8 in September. Sub-indexes were led by new orders, 55.7 vs. 53.4, and export orders, 56.0 vs. 50.0. The gain in export orders, boosted by strength in foreign currencies, is a special plus and matches a 57.0 in the export reading on the manufacturing side. Import orders were surprisingly strong at 55.5, up 4.5 points in the month and showing no setback from currency effects. Another plus in today's report was an easing, not an increase, in inflation pressures as prices paid fell 2.6 points to a nevertheless still elevated 63.5.
But other readings were softer including backlogs down 3.5 points to 43.5 and employment down nearly 1 point at a soft 51.8. Inventories have been declining in recent months, at 49.5 and indicating that purchasing managers are scaling back stocks in case demand slows.
Treasuries eased and the dollar firmed in initial reaction to the report, mostly in initial reaction to the report's headline strength. But the report's details show less strength, a factor that will limit the report's impact on the markets through the session.
The business activity index from the ISM non-manufacturing survey slowed slightly in September to 54.8 from 55.8 the month before. Still, September's figure is moderately positive. But the outlook for future activity is uncertain given weakness in order readings. New orders moderated to 53.4 vs. 57.0 in August. And backlog orders fell from an even 50.0, down 3 points to 47.0. Prices paid showed increasing pressure to 66.1 vs. 58.6, no doubt related to high energy costs.
Business activity index Consensus Forecast for October 07: 54.0
Range: 51.7 to 56.1
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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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