ISM: Services Sector Activity Slows in December
The Institute for Supply Management said its Non-Manufacturing Index (NMI) registered 53% in December, 0.9 percentage point lower than November’s reading of 53.9%, indicating continued growth at a slightly slower rate in the non-manufacturing sector. Economic activity in the non-manufacturing sector grew in December for the 48th consecutive month.
An NMI reading above 50% indicates the non-manufacturing sector economy is generally expanding; below 50% indicates the non-manufacturing sector is generally contracting.
The Non-Manufacturing Business Activity Index decreased to 55.2%, which is 0.3 percentage point lower than the 55.5% reported in November, reflecting growth for the 53rd consecutive month, but at a slightly slower rate.
The New Orders Index contracted after 52 consecutive months of growth for the first time since July 2009, when it registered 48%. The index decreased significantly by 7 percentage points to 49.4%, and the Employment Index increased 3.3 percentage points to 55.8%, indicating growth in employment for the 17th consecutive month and at a faster rate. The Prices Index increased 2.9 percentage points to 55.1%, indicating prices increased at a faster rate in December when compared to November.
Despite the substantial decrease in the New Orders Index, respondents’ comments predominately reflect that business conditions are stable.
The eight non-manufacturing industries reporting growth in December — listed in order — are: Management of Companies & Support Services; Retail Trade; Other Services; Finance & Insurance; Public Administration; Construction; Information; and Health Care & Social Assistance.
The eight industries reporting contraction in December — listed in order — are: Mining; Arts, Entertainment & Recreation; Educational Services; Transportation & Warehousing; Real Estate, Rental & Leasing; Utilities; Wholesale Trade; and Accommodation & Food Services.
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