November 2019 Non-Manufacturing ISM® Report On Business®
Business Activity Index at 51.6%, New Orders Index at 57.1%
Employment Index at 55.5%
(Tempe, Arizona) – Economic activity in the non-manufacturing sector grew in November for the 118th 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, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: “The NMI® registered 53.9 percent, which is 0.8 percentage points lower than the October reading of 54.7 percent. This represents continued growth in the non-manufacturing sector, at a slightly slower rate. The Non-Manufacturing Business Activity Index decreased to 51.6 percent, 5.4 percentage points lower than the October reading of 57 percent, reflecting growth for the 124th consecutive month.
The New Orders Index registered 57.1 percent; 1.5 percentage points higher than the reading of 55.6 percent in October. The Employment Index increased 1.8 percentage points in November to 55.5 percent from the October reading of 53.7 percent. The Prices Index increased 1.9 percentage points from the October reading of 56.6 percent to 58.5 percent, indicating that prices increased in November for the 30th consecutive month. According to the NMI®, 12 non-manufacturing industries reported growth. The non-manufacturing sector had a slight pullback in November. The respondents hope for a resolution on tariffs and continue to be hampered by constraints in labor resources.”
INDUSTRY PERFORMANCE
The 12 non-manufacturing industries reporting growth in November — listed in order — are: Real Estate, Rental & Leasing; Health Care & Social Assistance; Arts, Entertainment & Recreation; Accommodation & Food Services; Retail Trade; Finance & Insurance; Transportation & Warehousing; Management of Companies & Support Services; Information; Utilities; Professional, Scientific & Technical Services; and Public Administration. The five industries reporting a decrease are: Agriculture, Forestry, Fishing & Hunting; Mining; Wholesale Trade; Construction; and Other Services.
WHAT RESPONDENTS ARE SAYING
- “Generally sluggish demand in the past month; back to summertime levels.” (Agriculture, Forestry, Fishing & Hunting)
- “Activity is still up in all areas, but primarily in commercial construction.” (Construction)
- “No significant changes in business conditions. Closing out current projects and initiatives. Preparing for year-end and the beginning of 2020.” (Finance & Insurance)
- “Lower reimbursement rates will continue to affect funding levels.” (Health Care & Social Assistance)
- “Tariffs are impacting prices for a broad array of products used in the delivery of services and completion of projects for our clients. Upward pressure is impacting suppliers and their pricing to customers. We are seeing no relief from our customers, so we’re being negatively impacted by tariff-driven price increases. Numerous suppliers report looking for alternative manufacturing/supply locations outside of China, but with limited or no success so far.” (Management of Companies & Support Services)
- “Tariffs on steel and aluminum are still having a negative impact on costs. Oil and gas business is increasing, which is favorably impacting our orders.” (Other Services)
- “We’re optimistic [because the] economy appears to be on autopilot, despite all the political distractions. Stock market seems invincible, [and the] trade war with China appears to be in a stalemate. Job growth appears to be reaching an equilibrium point. Final economic demand appears strong, with positive spend forecast for the holidays.” (Professional, Scientific & Technical Services)
- “Business activity is lower after the end of the 2019 fiscal year. The federal government is under a continuing resolution appropriations bill. This means we have not received a full annual budget, and all spending is restricted to past operational budgets for only necessary items.” (Public Administration)
- “Fourth-quarter seasonal retail volume increase is affecting labor hours, temporary labor demand and availability of short-term rental trailers to compensate for overflow.” (Transportation & Warehousing)
ISM® NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM® NON-MANUFACTURING AND ISM® MANUFACTURING SURVEYS*
| Non-Manufacturing | Manufacturing | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Index | Series Index Nov | Series Index Oct | Percent Point Change | Direction | Rate of Change | Trend** (Months) | Series Index Nov | Series Index Oct | Percent Point Change |
| NMI®/ PMI® | 53.9 | 54.7 | -0.8 | Growing | Slower | 118 | 48.1 | 48.3 | -0.2 |
| Business Activity/ Production | 51.6 | 57.0 | -5.4 | Growing | Slower | 124 | 49.1 | 46.2 | +2.9 |
| New Orders | 57.1 | 55.6 | +1.5 | Growing | Faster | 124 | 47.2 | 49.1 | -1.9 |
| Employment | 55.5 | 53.7 | +1.8 | Growing | Faster | 69 | 46.6 | 47.7 | -1.1 |
| Supplier Deliveries | 51.5 | 52.5 | -1.0 | Slowing | Slower | 6 | 52.0 | 49.5 | +2.5 |
| Inventories | 50.5 | 50.5 | 0.0 | Growing | Same | 4 | 45.5 | 48.9 | -3.4 |
| Prices | 58.5 | 56.6 | +1.9 | Increasing | Faster | 30 | 46.7 | 45.5 | +1.2 |
| Backlog of Orders | 48.5 | 48.5 | 0.0 | Contracting | Same | 2 | 43.0 | 44.1 | -1.1 |
| New Export Orders | 52.0 | 50.0 | +2.0 | Growing | From Unchanged | 1 | 47.9 | 50.4 | -2.5 |
| Imports | 45.0 | 48.5 | -3.5 | Contracting | Faster | 3 | 48.3 | 45.3 | +3.0 |
| Inventory Sentiment | 58.5 | 57.0 | +1.5 | Too High | Faster | 269 | N/A | N/A | N/A |
| Customers’ Inventories | N/A | N/A | N/A | N/A | N/A | N/A | 45.0 | 47,8 | |
