NEW YORK - The Institute for Supply Management's non-manufacturing business activity composite index was 54.3 in July, up from 53.8 in June, on a seasonally adjusted basis, the group said today.
Economists polled by Thomson Reuters had expected a 53.0 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, slid to 52.7 from 53.8.
The employment index increased to 50.9 from 49.7.
The business activity/production index fell to 57.4 from 58.1, the new orders index was at 56.7, up from 54.4; backlog of orders slipped to 52.0 from 55.5; new export orders increased to 52.0 from 48.0; inventories decreased to 55.5 from 58.5; inventory sentiment remained at 59.0; the supplier deliveries index fell to 52.0 from 53.0; and imports remained at 48.0.
“The NMI (Non-Manufacturing Index) registered 54.3 percent in July, 0.5 percentage point higher than the 53.8 percent registered in June, indicating continued growth in the non-manufacturing sector at a slightly faster rate,” said Anthony Nieves, chair of the ISM's Non-Manufacturing Business Survey Committee. “The Non-Manufacturing Business Activity Index decreased 0.7 percentage point to 57.4 percent, reflecting growth for the eighth consecutive month. The New Orders Index increased 2.3 percentage points to 56.7 percent, and the Employment Index increased 1.2 percentage points to 50.9 percent, reflecting growth after one month of contraction. The Prices Index decreased 1.1 percentage points to 52.7 percent in July, indicating that prices are still increasing but at a slower rate than in June. According to the NMI, 13 non-manufacturing industries reported growth in July. Respondents’ comments are mixed. They vary by industry and company, with a tilt toward cautious optimism about business conditions.”
Members' general comments on business in the month included:
“Our business conditions continue to dramatically outpace last year’s.” (Information)
“Although unemployment remains high, consumer attitude has improved and translates into higher activity levels for us.” (Arts, Entertainment & Recreation)
“Capital funding remains tight.” (Accommodation & Food Services)
“Concerning forecasts and the instability in markets are continuing our focus on cautiousness.” (Retail Trade)
“We continue to see signs of improvement and a slow jobless recovery. We are also seeing a one-time windfall of business as a result of the disaster in the Gulf.” (Management of Companies & Support Services)
