NEW YORK - The Institute for Supply Management's non-manufacturing business activity composite index was 48.7 in November, off from 50.6 in October, on a seasonally adjusted basis, the group said today.
Economists polled by Thomson Reuters had expected a 51.5 level.
An index reading below 50 signals a slowing economy, while a level above 50 suggests expansion.
The prices paid index, closely watched for signs of inflation, grew to 57.8 from 53.0.
The employment index increased to 41.6 from 41.1.
The business activity index fell to 49.6 from 55.2, the new orders index was at 55.1, down from 55.6; backlog of orders slipped to 48.5 from 53.5; new export orders increased to 54.5 from 53.5; inventories increased to 45.5 from 43.0; inventory sentiment slipped to 61.5 from 63.5; the supplier deliveries index fell to 48.5 from 50.5, and imports held at 46.0.
“The NMI (Non-Manufacturing Index) registered 48.7 percent in November, 1.9 percentage points lower than the 50.6 percent registered in October, indicating contraction in the non-manufacturing sector after two consecutive months of expansion,” said Anthony Nieves, chair of the ISM's Non-Manufacturing Business Survey Committee. “The Non-Manufacturing Business Activity Index decreased 5.6 percentage points to 49.6 percent, reflecting contraction after three consecutive months of growth. The New Orders Index decreased 0.5 percentage point to 55.1 percent, and the Employment Index increased 0.5 percentage point to 41.6 percent. The Prices Index increased 4.8 percentage points to 57.8 percent in November, indicating an increase in prices paid from October. According to the NMI, six non-manufacturing industries reported growth in November. Respondents’ comments remain cautious about business conditions and reflect concern over the length of time for economic recovery.”
Members' general comments on business in the month included:
“Capital markets remain very tight; lenders are not releasing funds for development projects, limiting expansion.” (Accommodation & Food Services)
“Fourth quarter still looking grim, but potential upturn for Q1 2010.” (Professional, Scientific & Technical Services)
“No one trusts that the recovery is real. Seems everything and everyone is in a holding pattern.” (Public Administration)
“Business is still flat.” (Wholesale Trade)
“U.S. business remains better than 2007 levels, although it’s been through personnel and cost reductions that we are now profitable. Business continues to be about 8 percent below 2008 levels.” (Real Estate, Rental & Leasing)
