Thursday, September 05, 2013

ISM Non-Manufacturing Index at 58.6 indicates faster expansion in August

by Bill McBride on 9/05/2013 10:00:00 AM

The August ISM Non-manufacturing index was at 58.6%, up from 56.0% in July. The employment index increased in August to 57.0%, up from 53.2% in July. Note: Above 50 indicates expansion, below 50 contraction.

From the Institute for Supply Management: August 2013 Non-Manufacturing ISM Report On Business®

Economic activity in the non-manufacturing sector grew in August for the 44th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI™ registered 58.6 percent in August, 2.6 percentage points higher than the 56 percent registered in July. This indicates continued growth at a faster rate in the non-manufacturing sector. This month's NMI™ is the highest reading for the index since its inception in January 2008. The Non-Manufacturing Business Activity Index increased to 62.2 percent, which is 1.8 percentage points higher than the 60.4 percent reported in July, reflecting growth for the 49th consecutive month. The New Orders Index increased by 2.8 percentage points to 60.5 percent, and the Employment Index increased 3.8 percentage points to 57 percent, indicating growth in employment for the 13th consecutive month. The Prices Index decreased 6.7 percentage points to 53.4 percent, indicating prices increased at a significantly slower rate in August when compared to July. According to the NMI™, 16 non-manufacturing industries reported growth in August. The majority of respondents' comments continue to be mostly positive about business conditions and the direction of the overall economy."
emphasis added
ISM Non-Manufacturing Index Click on graph for larger image.

This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index.

This was above the consensus forecast of 55.0% and indicates faster expansion in August than in July.  A very strong survey.