Tom Hanna's Lifestream

Non-manufacturing Report At a Glance Index Readings Above 50 Represent Growth

NMI/PMI: 37.3 Reading above 50 represents growing activity Change: Down 7.1 Business Activity/Production Index: 33.0 Change: Down 11.2 New Orders: 35.4 Change: Down 8.6 Employment: 31.3 Change: Down 10.2 Inventories: 46.0 Change: Down 2.0

Technorati Tags: service, non-manufacturing, economy

November 2008 Non-Manufacturing ISM Report On Business® NMI (Non-Manufacturing Index) at 37.3% Business Activity Index at 33% New Orders Index at 35.4% Employment Index at 31.3% (Tempe, Arizona) — Economic activity in the non-manufacturing sector contracted in November, 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; and senior vice president — supply management for Hilton Hotels Corporation. “The NMI (Non-Manufacturing Index) registered 37.3 percent in November, 7.1 percentage points lower than the 44.4 percent registered in October, indicating contraction in the non-manufacturing sector for the second consecutive month. The Non-Manufacturing Business Activity Index decreased 11.2 percentage points to 33 percent. The New Orders Index decreased 8.6 percentage points to 35.4 percent, and the Employment Index decreased 10.2 percentage points to 31.3 percent. These are the lowest levels for each of these indexes since they were first reported in 1997. The Prices Index decreased 16.8 percentage points to 36.6 percent in November, indicating a decrease in prices from October. This is the largest-ever one-month decline in the index and its lowest level since it was first reported in 1997. According to the NMI, one non-manufacturing industry reported growth in November. Respondents’ comments reflect concern about the time line for the economy to stabilize and the impact it is having on discretionary spending and employment.” INDUSTRY PERFORMANCE (Based on the NMI) The one industry reporting growth in November based on the new NMI composite index is Health Care & Social Assistance. The 17 industries reporting contraction in November — listed in order — are: Transportation & Warehousing; Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Finance & Insurance; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Public Administration; Educational Services; Management of Companies & Support Services; Mining; Wholesale Trade; Utilities; Other Services; Retail Trade; Construction; and Information. WHAT RESPONDENTS ARE SAYING … “General slowdown and cost-cutting actions.” (Other Services) “Business remains strong despite the general economy.” (Health Care & Social Assistance) “Although funding for our core goals has not changed, new programs will be curtailed.” (Educational Services) “Store closures with associated employee layoffs, the continued downturn in the construction sector and the curtailment of local government spending have combined to hammer the local economy.” (Public Administration) “One unusual aspect of the current environment is that suppliers are getting very selective about who they conduct business with. We are spending more and more time ensuring that our key [suppliers] continue to see us as a key customer.” (Retail Trade) “General concerns about the economy continue to impact consumer confidence and our sales.” (Accommodation & Food Services) Source: Institute for Supply Management, formerly National Association of Purchasing Managers