Econoday Report: ISM Non-Mfg Survey 3, 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 8/3/05 For Jul 2005

Business Activity Index, Level
Actual	60.5
Consensus	61.5
Consensus Range	60.0 to 63.5

Highlights
The Institute For Supply Management's non-manufacturing report showed continued strength, with the business activity index at a strong 60.5 in July vs. 62.2 in June. The change is not significant, with the latest level at the high end of its current range.

A big jump in prices paid, to 70.3 vs. 59.8, was the big news of the report, offering a sharp contrast to the ISM's manufacturing report that is now showing contracting prices. The rise likely reflects the high price of oil, but strong demand in the non-manufacturing sector and the willingness of purchasers to pay more for materials and services to ensure future production could also be a factor.

New orders were strong while backlogs increased. Employment at 56.2 vs. 57.4 was also strong, showing continued hiring.

Though the rise in prices is a concern, the report is good news for the economy and, especially the employment index, is also a plus for the outlook on Friday's employment report.

Market Consensus Before Announcement
The business activity index from the ISM non-manufacturing survey increased to 62.2 in June. The non-manufacturing sector has shown stronger economic activity in the past several months than the manufacturing sector.

Business activity index Consensus Forecast for July 05: 61.5
Range: 60 to 63.5

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