Subscribe to our free, weekly email newsletter!


ISM non-manufacturing data for October is down slightly but still growing

By Jeff Berman, Group News Editor
November 05, 2012

The Institute for Supply Management’s (ISM) monthly Non-Manufacturing Report on Business for October was down slightly from October but remained firmly in growth territory.

The index ISM uses to measure non-manufacturing growth—known as the NMI—was 54.2 in October, down 0.9 percent from September and even with the 12-month average of 54.2. A reading above 50 represents growth. With the October NMI remaining above 50, economic activity in the non-manufacturing sector has grown for the last 34 months, according to ISM. The PMI, the index on which the ISM’s Manufacturing Report on Business is based on, increased 0.2 percent to 51.7 in October, marking the second consecutive month it has had been above 50, following three straight months of declines.

The report’s four core metrics were mixed on a sequential basis in October. Business Activity/Production was down 4.5 percent at 55.4, and New Orders were down 2.9 percent at 54.8. Employment was up 3.8 percent at 54.9.

“Employment is what has kept the NMI where it is, less than 1 percentage point down,” said Tony Nieves, chair of the ISM’s Non-Manufacturing Business Survey Committee, in an interview. “The nearly 4 percent uptick really helped out overall. Even with the seasonal adjustment in employment figures, we do see a retail spiked evident with the retail index.”

When asked about the 4.5 percent dip in Business Activity/Production, Nieves attributed that to some hesitancy out there on the behalf of ISM respondents about tomorrow’s Election, which he said is reflective of the “wait and see what happens” outlook taken on by many.

Despite the drop-off, Nieves stressed that this still shows a strong sequential growth rate. 

October Supplier Deliveries were flat at 51.5 and Inventories dropped 2.0 percent to 46.5.

“Deliveries are slowing month over month at the same rate,” he said. “In actuality, we had slightly slower deliveries over 50, which are slowing at the same pace or rate. What we might see impact us next month are the after-effects of Hurricane Sandy, considering its impact on ports and trucking in the Northeast corridor. Unlike Katrina, which was in the Gulf, this is more of a commerce hub.”

Prices saw a 2.5 percent drop in October to 65.6. Fuel and gasoline prices fluctuated throughout the month, which Nieves said is a timing issue as it relates to buying patterns for those commodities. This impacts things like trucking rates and fuel surcharges, and production costs, he explained.

When comparing the first ten months of 2012 to the first ten months of 2011, Nieves observed that the employment picture is slightly better in 2011, with confidence subsequently increasing, too.

“There is a bit more optimism now,” he said. “But it is a guarded optimism. A year ago, things were more mixed to a degree.”

 

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Josh Green, CEO of Panjiva, an online search engine with detailed information on global suppliers and manufacturers, said despite the recent trends coming out of China, it is important to remember is that on a big picture level, its impact on the global economy is big and growing.

Diesel gasoline’s average price per gallon dropped for the ninth week in a row, according to data issued by the Department of Energy’s Energy Information Administration (EIA) this week.

Citing currency exchange rates and lower fuel surcharges, second quarter revenue for transportation and logistics titan UPS dropped 1.2 percent to $14.1 billion, the Atlanta-based company reported today. Even though revenue was slightly down, earnings per share saw a 12 percent annual gain at $1.35, which was above Wall Street estimates of $1.27.

Does your organization struggle with the integration of information between your internal systems, processes and partner portals? You're not alone! Kapow Software alongside EFT has surveyed over 200 organizations regarding the importance of information access, visibility and discusses some of the major goals for supply chain and logistics organizations.

The U.S. Department of State maintained Thailand’s Tier 3 ranking, the lowest category, in its annual Trafficking in Persons (TIP) Report, which was released this week.

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA