Subscribe to our free, weekly email newsletter!


ISM Non-Manufacturing Index shows growth in April

By Jeff Berman, Group News Editor
May 04, 2011

Like its companion report, which focuses on manufacturing, the Institute for Supply Management’s (ISM) Non-Manufacturing Report on Business showed positive growth for the 17th straight month in April.

The ISM’s index for measuring the sector’s overall health—known as the NMI—was 52.8 in April, 4.5 percentage points lower than March’s 57.3.  Even with the sequential decline, a reading above 50 represents growth.

The NMI’s total reading is largely based on four core metrics. In April, they were all off from March levels, with Business Activity/Production down 6.0 percent at 53.7, New Orders off 11.4 percent at 52.7, and Employment falling 1.8 percent to 51.9.

“The report is pulled back, and we have had some slowing of growth here but it still beats contraction,” said Tony Nieves, chair of the ISM’s Non-Manufacturing Business Survey Committee, in an interview. “We experienced very strong growth during the first quarter, but we are seeing a moderation of that growth with rising prices, cost pressures, and a bit of a wane in company and consumer confidence and the employment index all pulling it back a little bit.”

Overall, Nieves said that the strong performance in the first quarter, which had unanticipated strength, was at first thought to be sustainable, but to keep that pace intact would have been difficult, given the jobs outlook and increasing prices.

April Inventories were flat compared to March at 55.5, and Prices were down 2.0 percent at 70.1. Backlog of Orders were down 0.5 percent at 55.5.

While these metrics show how April and March were very comparable, how things play out with the NMI in the coming months remain to be seen. If prices continue to increase, Nieves said consumers are extremely likely to be more reserved in how they spend money, adding they will use more discretion when making investments.

“It depends on the specific industry within the non-manufacturing sector,” he said. “We typically see a little bit of dip in the report around the July-August timeframe, and it then starts picking up in the latter part of September and October again. It will be interesting to see because of all the different dynamics we have experienced over the last three years where exactly things go with the report this summer. What we do see is strength in traction in the latter part of the spring historically in non-manufacturing, and I think that is part of the anticipation of what is expected in the summer as a lead-in compared to what is actually happening at that point in time.”

For related stories, please click here.

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

Lyon, France-based Norbert Dentressangle, a $5.5 billion global third-party logistics (3PL) services provider focused on global logistics, transport, ocean, and air services, said today it has acquired Des Moines, Iowa-based Jacobson Companies, a value-added warehousing (VAW) company, for $750 million from private equity firm Oak Hill Capital Partners.

Download the newly released research report, "Transportation Management Systems" conducted by Peerless Research Group (PRG) on behalf of Supply Chain Management Review and Logistics Management magazines. Learn what logistic experts are saying about their current supply chain technology infrastructures, how they tackle the transportation component, and revealed the gaps that still need to be filled in order to attain end to-end visibility of a streamlined supply chain.

From cost center to growth center. Get insightful opinions on changes in the marketplace from this independent survey of warehouse personnel. Motorola Solutions examined the current warehousing marketplace in our 2013 Warehouse Vision Report, conducted April-May of 2013.

Even though not all publicly-traded less-than-truckload carriers (LTL) have posted second quarter earnings yet, the early consensus for those that have issued results is looking very good.

The advance estimate for second quarter GDP at 4.0 percent could serve as a sign of a steadier and improving economy.

Article Topics

News · All topics

Comments

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


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA