Subscribe to our free, weekly email newsletter!


Despite sequential decrease, ISM reports non-manufacturing sector grew in June

By Jeff Berman, Group News Editor
July 05, 2012

Non-manufacturing activity in June was down slightly from May but still at a healthy level overall, according to the June edition of the Institute for Supply Management’s (ISM) Non-Manufacturing Report on Business.

The index ISM uses to measure non-manufacturing growth—known as the NMI—was
52.1 in June, which was down 1.6 percent compared to May’s 53.7, and fell for the third time in the last four months and expanded at its slowest pace since January 2010.

While the NMI declined, its companion index in the ISM’s monthly Manufacturing Report on Business saw a 3.8 percent drop in its index—known as the PMI—to 49.7. A reading above 50 represents growth. With the June NMI remaining above 50, economic activity in the non-manufacturing sector has grown for the last 30 months, according to ISM.

Three of the report’s four core metrics declined on a sequential basis in June. Business Activity/Production was down 3.9 percent at 51.7, and New Orders were down 2.2 percent at 55.5. Employment was up 1.5 percent at 50.8.

“We are still experiencing growth month-over-month,” said Tony Nieves, chair of the ISM’s Non-Manufacturing Business Survey Committee, in an interview. “And even with some metrics showing declines, Employment being up was a real bright spot. While we have been growing all year, Employment did not really flow with the other indices—and it has always lagged—so now confidence levels have increased in that area with less attrition. What is happening now bodes well for the non-manufacturing sector.”

Historically, Nieves said the summer months tend to bring with them a slowdown in NMI output, with this year being no exception. The pivotal time has always been in the September-October timeframe, when companies have better visibility into how the year will end up.

Supplier Deliveries were down 2.0 percent to 51.0 in June, and Inventories were down 3.0 percent to 53.0. Backlog of Orders dipped 5.5 percent to 47.5.

“Even though Inventories were down somewhat and supplier deliveries were also down, the lower backlog number may mean that it is taking longer for goods to arrive at their destinations,” he said.

Prices were off only 0.9 percent at 48.9, reflecting the ongoing decrease in petroleum-based products.

About the Author

image
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff joined the Supply Chain Group in 2005 and leads online and print news operations for these publications. In 2009, Jeff led Logistics Management to the Silver Medal of Folio’s Eddie Awards in the Best B2B Transportation/Travel Website category. 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. If you want to contact Jeff with a news tip or idea,
please send an e-mail to .(JavaScript must be enabled to view this email address).


Subscribe to Modern Materials Handling magazine

Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!

Recent Entries

Transportation & Logistics companies are winning customers and improving profitability by taking a fresh look at their operations. Don't miss this brand new ebook from Barcoding, Inc. and Honeywell, "Automating Transportation and Logistics: How automation and assessment programs are helping T&L companies cut costs, increase cash, and improve customer experience."

After 53 years in Jonesboro, Ark., the company will add new manufacturing capabilities and 75 permanent jobs.

Loscam, Asia Pacific’s leading pallet pooling service provider, recently opened a new depot in Kota Kinabalu, capital city of the state of Sabah Malaysia, further extending its services to East Malaysia.

The PMI, the ISM’s index to measure growth inched up 0.7 percent to 53.5 over May’s 52.8 (a PMI of 50 or greater represents growth). This reading marks sequential growth for the third month in a row.

More than 30 leading suppliers of reusable products and services will be available in the Reusable Packaging Pavilion. The exhibitors include manufacturers, material suppliers, providers of washing and other specialty equipment, and service providers of reusable packaging systems and solutions.

Article Topics

News · ISM · NMI · All topics

About the Author

Jeff Berman, 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. Contact Jeff Berman.


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