NEW YORK - The Institute for Supply Management's non-manufacturing business activity composite index was 50.9 in September, up from 48.4 in August, on a seasonally adjusted basis, the group said today.
Economists polled by Thomson Reuters had expected a 50.0 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, fell to 63.1 from 63.1.
The employment index increased to 44.3 from 43.5.
The business activity index rose to 55.1 from 51.3, the new orders index was at 54.2, up from 49.9; backlog of orders surged to 51.5 from 41.0; new export orders decreased to 48.5 from 54.0; inventories increased to 47.4 from 43.0; inventory sentiment slid to 62.0 from 67.5; the supplier deliveries index rose to 50.0 from 49.0, and imports grew to 51.5 from 49.0.
“The NMI (Non-Manufacturing Index) registered 50.9 percent in September, 2.5 percentage points higher than the 48.4 percent registered in August, indicating growth in the non-manufacturing sector after 11 consecutive months of contraction,” said Anthony Nieves, chair of the ISM's Non-Manufacturing Business Survey Committee. “The Non-Manufacturing Business Activity Index increased 3.8 percentage points to 55.1 percent. This is the second consecutive month this index has reflected growth since September 2008. The New Orders Index increased 4.3 percentage points to 54.2 percent, and the Employment Index increased 0.8 percentage point to 44.3 percent. The Prices Index decreased 14.3 percentage points to 48.8 percent in September, indicating a significant reversal and decrease in prices paid from August. According to the NMI, five non-manufacturing industries reported growth in September. Even with the overall month-over-month growth reflected in the report this month, respondents’ comments vary by industry and remain mixed about business conditions and the overall economy.”
Members' general comments on business in the month included:
“Sales are very steady and have risen some each month in the past six months. The bottom is now here.” (Construction)
“Economic recovery turnaround has begun in the financial services sector; however, cautious expense management is still practiced.” (Finance & Insurance)
“Lack of capital available for new project development.” (Accommodation & Food Services)
“Continue to see signs of slow recovery, but customers are still putting orders off until the beginning of 2010.” (Professional, Scientific & Technical Services)
“Inconsistent … just when things seem to be settling a bit, a new set of pressures develops.” (Retail Trade)
“Improvements seen in prices available for natural gas and other fuels.” (Educational Services)
