NEW YORK - The Institute for Supply Management's non-manufacturing business activity composite index was 55.4 in May, unchanged from 55.4 in April, on a seasonally adjusted basis, the group said today.
Economists polled by Thomson Reuters had expected a 55.7 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 60.6 from 64.7.
The employment index increased to 50.4 from 49.5.
The business activity/production index rose to 61.1 from 60.3, the new orders index was at 57.1, down from 58.2; backlog of orders climbed to 56.0 from 49.5; new export orders decreased to 53.5 from 57.0; inventories increased to 62.5 from 54.5; inventory sentiment gained to 60.5 from 53.5; the supplier deliveries index fell to 53.0 from 53.5; and imports remained at 56.5.
“The NMI (Non-Manufacturing Index) registered 55.4 percent in May, the same percentage as registered in both April and March, indicating continued growth in the non-manufacturing sector,” said Anthony Nieves, chair of the ISM's Non-Manufacturing Business Survey Committee. “The Non-Manufacturing Business Activity Index increased 0.8 percentage point to 61.1 percent, reflecting growth for the sixth consecutive month. The New Orders Index decreased 1.1 percentage points to 57.1 percent, and the Employment Index increased 0.9 percentage point to 50.4 percent, reflecting growth for the first time after 28 consecutive months of contraction. The Prices Index decreased 4.1 percentage points to 60.6 percent in May, indicating that prices are still increasing but at a slower rate than in April. According to the NMI, 16 non-manufacturing industries reported growth in May. Respondents' comments remain mostly positive about current business conditions and the general direction of the economy.”
Members' general comments on business in the month included:
"Our business continues to grow. We are significantly above last year's pace." (Information)
"Business is steady right now — not the normal spring for construction, but improving." (Construction)
"Outlook is still generally flat for the remainder of this year, with signs that orders and activity will be picking up." (Professional, Scientific & Technical Services)
"Continuing our pattern of cautious optimism. Consumers appear to be coming out of hibernation and willing to spend. We expect that if this trend can remain solid, we'll in turn spend additional dollars to support and drive sales activities." (Retail Trade)
"Customers' activity is improving in some parts of the country." (Wholesale Trade)
"We continue to 'staff to volume' in order to control labor and supply costs. Census continues to be low." (Health Care & Social Assistance)
