NEW YORK - The Institute for Supply Management's non-manufacturing business activity composite index was 50.1 in December, up from 48.7 in November, on a seasonally adjusted basis, the group said today.
Economists polled by Thomson Reuters had expected a 50.5 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 58.7 from 57.8.
The employment index increased to 44.0 from 41.6.
The business activity index rose to 53.7 from 49.6, the new orders index was at 52.1, down from 55.1; backlog of orders slipped to 48.0 from 48.5; new export orders decreased to 46.0 from 54.5; inventories increased to 51.5 from 45.5; inventory sentiment slipped to 61.0 from 61.5; the supplier deliveries index grew to 50.5 from 48.5, and imports jumped to 52.5 from 46.0.
“The NMI (Non-Manufacturing Index) registered 50.1 percent in December, 1.4 percentage points higher than the 48.7 percent registered in November, indicating growth in the non-manufacturing sector for three out of the last four months,” said Anthony Nieves, chair of the ISM's Non-Manufacturing Business Survey Committee. “The Non-Manufacturing Business Activity Index increased 4.1 percentage points to 53.7 percent, reflecting growth after contracting for one month. The New Orders Index decreased 3 percentage points to 52.1 percent, and the Employment Index increased 2.4 percentage points to 44 percent. The Prices Index increased 0.9 percentage point to 58.7 percent in December, indicating a slight increase in prices paid from November. According to the NMI, seven non-manufacturing industries reported growth in December. Respondents’ comments vary by industry and, for the most part, are either neutral or slightly more optimistic about business conditions.”
Members' general comments on business in the month included:
“Economy seems to have leveled off with expectation of an upswing in our business in Q1 2010.” (Professional, Scientific & Technical Services)
“There has been a slight upturn in our business activities; however, it is not entirely attributable to any one particular source.” (Public Administration)
“The environment seems to be improving, but we will continue to be cautious as we look forward.” (Retail Trade)
“The current economic conditions are continuing to have a flat or negative effect on our business.” (Wholesale Trade)
“No items in short supply; suppliers looking to set up agreements for 2010 with quarterly or semiannual price reviews.” (Arts, Entertainment & Recreation)
