Econoday Report: ISM Non-Mfg Survey 4, 2005

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ISM Non-Mfg Survey

Definition
The non-manufacturing ISM surveys nearly 400 firms from 60 sectors across the United States, including agriculture, mining, construction, transportation, communications, wholesale trade and retail trade. Financial market players monitor the business activity index, because a composite index, like its manufacturing cousin, is not compiled by the ISM. Why Investors Care

Released on 5/4/05 For Apr 2005

Business Activity Index, Level
Actual	61.7
Consensus	61.5
Consensus Range	59.0 to 64.0

Highlights
The Institute For Supply Management's non-manufacturing index edged back slightly as expected in April, to 61.7 from 63.1 in March.

The decline, which indicates a slowing but still strong rate of growth in the nation's service, mining and utility sectors, is no surprise given a decline in the growth of new orders in the prior month.

New orders in April also slowed compared to the prior month, at 58.8 from 62.1 in March. This too suggests slowing overall growth in the months ahead. Note that backlog growth also slowed, to 54.0 from 56.5.

Unlike the ISM's manufacturing report on Monday, non-manufacturing inventories rose, to 54.5 from 52.5. The gain, weighed against a steady rate of supplier deliveries (unchanged at 53.0), suggests that non-manufacturing purchasers, unlike their colleagues on the manufacturing side, see continued strong demand ahead.

Employment fell back to 53.3 from 57.1, a possible concern ahead of employment data on Friday. Prices paid eased a bit to 61.9 from 65.6.

There was no reaction to the data in the financial markets, but they do point to firm but slowing rates of growth in the economy.

Market Consensus Before Announcement
The business activity index from the ISM non-manufacturing survey jumped 3.3 percentage points in March to 63.1. With the drop in the NAPM-Chicago, which incorporates non-manufacturing activity, it could signal a drop in the business activity index too.

Business activity index Consensus Forecast for Apr 05: 61.5
Range: 59 to 64

Trends

The ISM non-manufacturing survey does not compile a composite index like its manufacturing cousin. The business activity index, which is actually akin to the production index in the manufacturing survey, is widely followed as the key figure from this survey.

Data Source: Haver Analytics

2005 Release Schedule

Released On: 1/5 2/3 3/3 4/1 5/4 6/3 7/6 8/3 9/6 10/5 11/3 12/5

Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov