UPDATE: ISM non-Manufacturing Index at 56.5 in June 2016, Outpacing Expectations

(Updated - July 6, 2016 10:10 AM EDT)

ISM Non-Manf Composite 56.5 vs 53.3 Expected

UPDATE - The ISM press release follows:

Economic activity in the non-manufacturing sector grew in June for the 77th consecutive month, 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, CPSM, C.P.M., CFPM, chair of the Institute for Supply Management^® (ISM^®) Non-Manufacturing Business Survey Committee. "The NMI^® registered 56.5 percent in June, 3.6 percentage points higher than the May reading of 52.9 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased to 59.5 percent, 4.4 percentage points higher than the May reading of 55.1 percent, reflecting growth for the 83rd consecutive month, at a faster rate in June. The New Orders Index registered 59.9 percent, 5.7 percentage points higher than the reading of 54.2 percent in May. The Employment Index grew 3 percentage points in June after one month of contraction to 52.7 percent from the May reading of 49.7 percent. The Prices Index decreased 0.1 percentage point from the May reading of 55.6 percent to 55.5 percent, indicating prices increased in June for the third consecutive month. According to the NMI^®, 15 non-manufacturing industries reported growth in June. Respondents’ comments are mostly positive about business conditions and the economy. Overall, the report reflects a strong rebound from the 'cooling-off' of the previous month for the non-manufacturing sector."

INDUSTRY PERFORMANCE

The 15 non-manufacturing industries reporting growth in June — listed in order — are: Mining; Arts, Entertainment & Recreation; Management of Companies & Support Services; Retail Trade; Health Care & Social Assistance; Utilities; Real Estate, Rental & Leasing; Accommodation & Food Services; Transportation & Warehousing; Wholesale Trade; Information; Public Administration; Agriculture, Forestry, Fishing & Hunting; Construction; and Finance & Insurance. The three industries reporting contraction in June are: Educational Services; Professional, Scientific & Technical Services; and Other Services.

WHAT RESPONDENTS ARE SAYING ...

• "Business is generally good and following historical seasonal patterns. Suppliers report being very busy compared to last year." (Management of Companies & Support Services)
• "Business is strong in the private sector; bidding a lot of commercial buildings." (Construction)
• "Slightly greater activity, specifically due to midyear reporting." (Finance & Insurance)
• "Oil prices seem to be stabilizing in the $48/bbl. range which has eased the panic in the industry over falling prices." (Mining)
• "Overall business appears to have flattened out. New business for the next six months looks good according to sales forecasts." (Professional, Scientific & Technical Services)
• "Steady movement with negligible fluctuations both up and down." (Public Administration)
• "Business was slow, but starting to pick up this month." (Retail Trade)
• "More new business." (Utilities)
• "Oil, gas, steel [and] coal mining continues to drag down revenues. Automotive, food, package handling and airports [are] strong." (Wholesale Trade)
• "Overall business conditions are good, even though growth is flat." (Health Care & Social Assistance)

ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS* JUNE 2016
	Non-Manufacturing						Manufacturing
Index	Series Index Jun	Series Index May	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index Jun	Series Index May	Percent Point Change
NMI®/PMI®	56.5	52.9	+3.6	Growing	Faster	77	53.2	51.3	+1.9
Business Activity/Production	59.5	55.1	+4.4	Growing	Faster	83	54.7	52.6	+2.1
New Orders	59.9	54.2	+5.7	Growing	Faster	83	57.0	55.7	+1.3
Employment	52.7	49.7	+3.0	Growing	From Contracting	1	50.4	49.2	+1.2
Supplier Deliveries	54.0	52.5	+1.5	Slowing	Faster	6	55.4	54.1	+1.3
Inventories	55.5	54.0	+1.5	Growing	Faster	15	48.5	45.0	+3.5
Prices	55.5	55.6	-0.1	Increasing	Slower	3	60.5	63.5	-3.0
Backlog of Orders	47.5	50.0	-2.5	Contracting	From Growing	1	52.5	47.0	+5.5
New Export Orders	53.0	49.0	+4.0	Growing	From Contracting	1	53.5	52.5	+1.0
Imports	54.0	53.5	+0.5	Growing	Faster	5	52.0	50.0	+2.0
Inventory Sentiment	62.5	60.0	+2.5	Too High	Faster	229	N/A	N/A	N/A
Customers' Inventories	N/A	N/A	N/A	N/A	N/A	N/A	51.0	50.0	+1.0
Overall Economy				Growing	Faster	83
Non-Manufacturing Sector				Growing	Faster	77

* Non-Manufacturing ISM^® Report On Business^® data is seasonally adjusted for Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM^® Report On Business^® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.

** Number of months moving in current direction.

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