EconoIndicators

Non-manufacturing Report At a Glance
Index Readings Above 50 Represent Growth

• NMI/PMI: 44.4
• Reading above 50 represents growing activity
• Change: Down 5.8
• Business Activity/Production Index: 44.2
• Change: Down 7.9
• New Orders: 44.0
• Change: Down 6.8
• Employment: 41.5
• Change: Down 2.7
• Inventories: 48.0
• Change: Up 2.5

Technorati Tags: service, non-manufacturing, economy

October 2008 Non-Manufacturing ISM Report On Business®
NMI (Non-Manufacturing Index) at 44.4%
Business Activity Index at 44.2%
New Orders Index at 44%
Employment Index at 41.5%

(Tempe, Arizona) — Economic activity in the non-manufacturing sector contracted in October, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.
The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee; and senior vice president — supply management for Hilton Hotels Corporation. “The NMI (Non-Manufacturing Index) registered 44.4 percent in October, 5.8 percentage points lower than the 50.2 percent registered in September, indicating contraction in the non-manufacturing sector after two consecutive months of growth. The Non-Manufacturing Business Activity Index decreased 7.9 percentage points to 44.2 percent. The New Orders Index decreased 6.8 percentage points to 44 percent, and the Employment Index decreased 2.7 percentage points to 41.5 percent. The Prices Index decreased 16.6 percentage points to 53.4 percent in October, indicating a slower rate in price increases than in September. This is the lowest reading for the Prices Index since July 2003 when it registered 51.4 percent, and is also the largest one-month decline since the index was first reported in 1997. According to the NMI, three non-manufacturing industries reported growth in October. Respondents’ comments indicate ongoing concern about the business environment and the economy.”
INDUSTRY PERFORMANCE (Based on the NMI)
The three industries reporting growth in October based on the new NMI composite index — listed in order — are: Other Services*; Health Care & Social Assistance; and Utilities. The 13 industries reporting contraction in October are: Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Management of Companies & Support Services; Accommodation & Food Services; Construction; Retail Trade; Agriculture, Forestry, Fishing & Hunting; Educational Services; Professional, Scientific & Technical Services; Public Administration; Finance & Insurance; Information; and Wholesale Trade.
WHAT RESPONDENTS ARE SAYING …
“Financial services industry continues to be impacted by the global economic crisis — impacting all aspects and areas of the business and supply management.” (Finance & Insurance)
“Economic slowdown starting to have an impact on customer count and check averages.” (Accommodation & Food Services)
“Uncertainty is having the usual effect on business. Our response is traditional — stop all discretionary spending.” (Management of Companies & Support Services)
“General pick-up in business in spite of all the bad economic global news.” (Wholesale Trade)
“We are experiencing a slowdown in new job orders and existing job awards are lower. Clients are not extending project support professionals.” (Professional, Scientific & Technical Services)
“Business down significantly! Discretionary spending disappearing.” (Arts, Entertainment & Recreation)

Source: Institute for Supply Management, formerly National Association of Purchasing Managers