--- To enhance the value and performance of procurement and SCM practitioners and their organizations worldwide ---

April 2012 Non-Manufacturing ISM Report On Business®

FOR RELEASE: May 3, 2012


Contact: Rose Marie Goupil
ISM, ROB Media Relations
Tempe, Arizona
800/888-6276, Ext. 3015
E-mail: rgoupil@ism.ws


NMI at 53.5%

DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report's information reflects the entire United States, while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. The information compiled in this report is for the month of April 2012.


Business Activity Index at 54.6%
New Orders Index at 53.5%
Employment Index at 54.2%

(Tempe, Arizona) — Economic activity in the non-manufacturing sector grew in April for the 28th 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, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI registered 53.5 percent in April, 2.5 percentage points lower than the 56 percent registered in March. This indicates continued growth this month, but at a slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 54.6 percent, which is 4.3 percentage points lower than the 58.9 percent reported in March, reflecting growth for the 33rd consecutive month. The New Orders Index decreased by 5.3 percentage points to 53.5 percent, and the Employment Index decreased by 2.5 percentage points to 54.2 percent, indicating continued growth in employment at a slower rate. The Prices Index decreased 10.3 percentage points to 53.6 percent, indicating prices increased at a significantly slower rate in April when compared to March. According to the NMI, 15 non-manufacturing industries reported growth in April. Respondents' comments affirm the slowing rate of growth. In addition, they remain concerned about rising fuel costs and the impact on shipping, transportation and petroleum-based product costs."

INDUSTRY PERFORMANCE

The 15 non-manufacturing industries reporting growth in April — listed in order — are: Retail Trade; Information; Construction; Management of Companies & Support Services; Arts, Entertainment & Recreation; Educational Services; Finance & Insurance; Accommodation & Food Services; Wholesale Trade; Real Estate, Rental & Leasing; Transportation & Warehousing; Other Services; Public Administration; Professional, Scientific & Technical Services; and Health Care & Social Assistance. The three industries reporting contraction in April are: Agriculture, Forestry, Fishing & Hunting; Utilities; and Mining.

WHAT RESPONDENTS ARE SAYING …
  • "Sales have improved slightly, yet still lag behind pre-recession highs. The hiring freeze has been lifted, but open positions are still being vetted for need, timing of the fill, and so forth." (Public Administration)
  • "Business conditions have improved in March and April 2012. We have received more job inquiries and job awards in this period. The increase is about 15 percent." (Professional, Scientific & Technical Services)
  • "Current conditions compared to prior year are good. Fuel and food continue to be a challenge." (Arts, Entertainment & Recreation)
  • "Business is slowing — and projections for the rest of the year are being lowered." (Professional, Scientific & Technical Services)
  • "Business is still ahead of last year, but has leveled off a little." (Wholesale Trade)
  • "High price of petroleum/oil driving up costs for all market areas." (Transportation & Warehousing)
ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE
COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS*
APRIL 2012
  Non-Manufacturing Manufacturing
Index Series
Index
Apr
Series
Index
Mar
Percent
Point
Change
Direction Rate
of
Change
Trend**
(Months)
Series
Index
Apr
Series
Index
Mar
Percent
Point
Change
NMI/PMI 53.5 56.0 -2.5 Growing Slower 28 54.8 53.4 +1.4
Business Activity/Production 54.6 58.9 -4.3 Growing Slower 33 61.0 58.3 +2.7
New Orders 53.5 58.8 -5.3 Growing Slower 33 58.2 54.5 +3.7
Employment 54.2 56.7 -2.5 Growing Slower 4 57.3 56.1 +1.2
Supplier Deliveries 51.5 49.5 +2.0 Slowing From Faster 1 49.2 48.0 +1.2
Inventories 54.0 54.0 0.0 Growing Same 3 48.5 50.0 -1.5
Prices 53.6 63.9 -10.3 Increasing Slower 33 61.0 61.0 0.0
Backlog of Orders 53.0 49.5 +3.5 Growing From Contracting 1 49.5 52.5 -3.0
New Export Orders 58.0 52.5 +5.5 Growing Faster 9 59.0 54.0 +5.0
Imports 56.5 56.0 +0.5 Growing Faster 5 53.5 53.5 0.0
Inventory Sentiment 61.0 58.5 +2.5 Too High Faster 179 N/A N/A N/A
Customers' Inventories N/A N/A N/A N/A N/A N/A 45.5 44.5 +1.0

* Non-Manufacturing ISM Report On Business® data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. Manufacturing ISM Report On Business® data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.
** Number of months moving in current direction.


COMMODITIES REPORTED UP / DOWN IN PRICE, and IN SHORT SUPPLY

Commodities Up in Price

Air Freight; Airfares (4); Anti-Bacterial Hand Sanitizers; Apparel; Asphalt; Asphalt Construction; Auto Parts; Automobile Tires; Beef; Benefits; Cleaning Products; Construction Services; Diesel Fuel (3); #1 Diesel Fuel (5); #2 Diesel Fuel (6); Delivery Services; Food & Beverage (2); Fuel (4); Fuel Products (2); Fuel Surcharges (2); Fuel Transportation; Gasoline (4); Hotel Rates; Labor; Office Products and Supplies; Paper Products; Plastic Bags (2); Plastic Can Liners; Plastic Film (3); Plastic Products (3); Rental Cars; Software Maintenance; Steel; Transportation Costs; 3/4-Ton Pickup Trucks (4X4); Trucks; and #10 Window Envelopes.

Commodities Down in Price

Carbon Steel Products; Cheese; Computer Equipment/Hardware; Copper Based Products; Electricity; and Natural Gas (3).

Commodities in Short Supply

IV Solutions; and Pharmaceuticals (2).

Note: The number of consecutive months the commodity is listed is indicated after each item.



APRIL 2012 NON-MANUFACTURING INDEX SUMMARIES


NMI

In April, the NMI registered 53.5 percent, indicating continued growth in the non-manufacturing sector for the 28th consecutive month. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.

NMI HISTORY
Month NMI Month NMI
Apr 2012 53.5 Oct 2011 52.6
Mar 2012 56.0 Sep 2011 52.6
Feb 2012 57.3 Aug 2011 53.8
Jan 2012 56.8 Jul 2011 53.4
Dec 2011 53.0 Jun 2011 53.3
Nov 2011 52.6 May 2011 54.5
Average for 12 months – 54.1
High – 57.3
Low – 52.6

Business Activity

ISM's Non-Manufacturing Business Activity Index in April registered 54.6 percent, 4.3 percentage points lower than the 58.9 percent registered in March. Fourteen industries reported increased business activity, and three industries reported decreased activity for the month of April. Comments from respondents include: "Increasing business in our sector" and "This is the time of year when we normally have a sale and run specials. Customers have responded well."

The industries reporting growth of business activity in April — listed in order — are: Retail Trade; Construction; Information; Arts, Entertainment & Recreation; Transportation & Warehousing; Management of Companies & Support Services; Educational Services; Finance & Insurance; Real Estate, Rental & Leasing; Other Services; Wholesale Trade; Accommodation & Food Services; Public Administration; and Health Care & Social Assistance. The industries reporting decreased business activity in April are: Mining; Utilities; and Professional, Scientific & Technical Services.


Business Activity
%
Higher
%
Same
%
Lower

Index
Apr 2012 34 51 15 54.6
Mar 2012 37 53 10 58.9
Feb 2012 34 52 14 62.6
Jan 2012 28 54 18 59.5

New Orders

ISM's Non-Manufacturing New Orders Index grew in April for the 33rd consecutive month. The index registered 53.5 percent, a decrease of 5.3 percentage points from the 58.8 percent reported in March. Comments from respondents include: "Increased activity due to expansion and new client signings" and "Increased contract renewals."

The 12 industries reporting growth of new orders in April — listed in order — are: Retail Trade; Information; Construction; Accommodation & Food Services; Educational Services; Management of Companies & Support Services; Arts, Entertainment & Recreation; Transportation & Warehousing; Real Estate, Rental & Leasing; Finance & Insurance; Wholesale Trade; and Professional, Scientific & Technical Services. The four industries reporting contraction of new orders in April are: Mining; Utilities; Health Care & Social Assistance; and Public Administration.


New Orders
%
Higher
%
Same
%
Lower

Index
Apr 2012 31 54 15 53.5
Mar 2012 33 57 10 58.8
Feb 2012 31 58 11 61.2
Jan 2012 28 57 15 59.4

Employment

Employment activity in the non-manufacturing sector grew in April at a slower rate, as ISM's Non-Manufacturing Employment Index registered 54.2 percent. This reflects a decrease of 2.5 percentage points when compared to the 56.7 percent registered in March. Twelve industries reported increased employment, two industries reported decreased employment, and four industries reported unchanged employment compared to March. Comments from respondents include: "Increased business" and "New positions to assist with increased sales."

The industries reporting an increase in employment in April — listed in order — are: Mining; Retail Trade; Finance & Insurance; Construction; Management of Companies & Support Services; Information; Accommodation & Food Services; Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Wholesale Trade; Professional, Scientific & Technical Services; and Public Administration. The industries reporting a reduction in employment in April are: Health Care & Social Assistance; and Utilities.


Employment
%
Higher
%
Same
%
Lower

Index
Apr 2012 26 65 9 54.2
Mar 2012 24 66 10 56.7
Feb 2012 17 74 9 55.7
Jan 2012 18 66 16 57.4

Supplier Deliveries

The Supplier Deliveries Index slowed in April after two consecutive months of faster deliveries. The index registered 51.5 percent in April. This is 2 percentage points higher than the 49.5 registered in March. A reading above 50 percent indicates slower deliveries, and below 50 percent indicates faster deliveries.

The seven industries reporting slower deliveries in April — listed in order — are: Retail Trade; Other Services; Wholesale Trade; Management of Companies & Support Services; Educational Services; Information; and Health Care & Social Assistance. The three industries reporting faster supplier deliveries in April are: Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; and Finance & Insurance. Eight industries reported no change in supplier deliveries in April compared to March.


Supplier Deliveries
%
Slower
%
Same
%
Faster

Index
Apr 2012 8 87 5 51.5
Mar 2012 4 91 5 49.5
Feb 2012 4 91 5 49.5
Jan 2012 7 88 5 51.0

Inventories

ISM's Non-Manufacturing Inventories Index grew in April for the third consecutive month. The index registered 54 percent, which is the same reading that was reported in March. Of the total respondents in April, 28 percent indicated they do not have inventories or do not measure them. Comments from respondents include: "Higher level of activity driven by sales improvement" and "Same levels; increased replenishment."

The eight industries reporting an increase in inventories in April — listed in order — are: Mining; Wholesale Trade; Real Estate, Rental & Leasing; Accommodation & Food Services; Information; Utilities; Finance & Insurance; and Public Administration. The seven industries reporting decreases in inventories in April — listed in order — are: Construction; Other Services; Arts, Entertainment & Recreation; Health Care & Social Assistance; Management of Companies & Support Services; Transportation & Warehousing; and Retail Trade.


Inventories
%
Higher
%
Same
%
Lower

Index
Apr 2012 24 60 16 54.0
Mar 2012 22 64 14 54.0
Feb 2012 20 67 13 53.5
Jan 2012 16 62 22 47.0

Prices

Prices paid by non-manufacturing organizations for purchased materials and services increased at a substantially slower rate in April. ISM's Non-Manufacturing Prices Index for April registered 53.6 percent, 10.3 percentage points lower than the 63.9 percent reported in March. In April, the percentage of respondents reporting higher prices is 29 percent, the percentage indicating no change in prices paid is 64 percent, and 7 percent of the respondents reported lower prices.

Fourteen non-manufacturing industries reported an increase in prices paid during the month of April, in the following order: Accommodation & Food Services; Educational Services; Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; Other Services; Retail Trade; Finance & Insurance; Public Administration; Professional, Scientific & Technical Services; Real Estate, Rental & Leasing; Health Care & Social Assistance; Management of Companies & Support Services; Construction; and Utilities. The two industries reporting a decrease in prices paid during April are: Arts, Entertainment & Recreation; and Information.


Prices
%
Higher
%
Same
%
Lower

Index
Apr 2012 29 64 7 53.6
Mar 2012 40 58 2 63.9
Feb 2012 41 55 4 68.4
Jan 2012 31 64 5 63.5

Backlog of Orders

ISM's Non-Manufacturing Backlog of Orders Index grew in April after one month of contraction. The index registered 53 percent, 3.5 percentage points higher than the 49.5 percent reported in March. Of the total respondents in April, 36 percent indicated they do not measure backlog of orders.

The nine industries reporting an increase in order backlogs in April — listed in order — are: Health Care & Social Assistance; Accommodation & Food Services; Wholesale Trade; Information; Management of Companies & Support Services; Transportation & Warehousing; Public Administration; Construction; and Finance & Insurance. The four industries reporting lower backlog of orders in April are: Mining; Other Services; Utilities; and Professional, Scientific & Technical Services.


Backlog of Orders
%
Higher
%
Same
%
Lower

Index
Apr 2012 15 76 9 53.0
Mar 2012 14 71 15 49.5
Feb 2012 20 66 14 53.0
Jan 2012 16 67 17 49.5

New Export Orders

Orders and requests for services and other non-manufacturing activities to be provided outside of the United States by domestically based personnel grew in April for the ninth consecutive month. The New Export Orders Index for April registered 58 percent, which is 5.5 percentage points higher than the 52.5 percent reported in March. Of the total respondents in April, 66 percent indicated they either do not perform, or do not separately measure, orders for work outside of the United States.

The eight industries reporting an increase in new export orders in April — listed in order — are: Finance & Insurance; Management of Companies & Support Services; Arts, Entertainment & Recreation; Construction; Retail Trade; Information; Accommodation & Food Services; and Wholesale Trade. The three industries reporting a decrease in export orders in April are: Other Services; Professional, Scientific & Technical Services; and Mining.


New Export Orders
%
Higher
%
Same
%
Lower

Index
Apr 2012 26 64 10 58.0
Mar 2012 15 75 10 52.5
Feb 2012 24 61 15 54.5
Jan 2012 24 65 11 56.5

Imports

The ISM Non-Manufacturing Imports Index grew in April for the fifth consecutive month. The index registered 56.5 percent, which is 0.5 percentage point higher than the 56 percent reported in March. Sixty percent of respondents reported that they do not use, or do not track, the use of imported materials.

The seven industries reporting an increase in the use of imports in April — listed in order — are: Arts, Entertainment & Recreation; Retail Trade; Information; Finance & Insurance; Transportation & Warehousing; Management of Companies & Support Services; and Construction. The only industry reporting a decrease in imports for the month of April is Wholesale Trade. Nine industries reported no change in imports for the month of April compared to March.


Imports
%
Higher
%
Same
%
Lower

Index
Apr 2012 17 79 4 56.5
Mar 2012 18 76 6 56.0
Feb 2012 17 70 13 52.0
Jan 2012 17 76 7 55.0

Inventory Sentiment

The ISM Non-Manufacturing Inventory Sentiment Index in April registered 61 percent, which is 2.5 percentage points higher than the 58.5 percent reported in March. This indicates that respondents believe their inventories are still too high at this time. In April, 30 percent of respondents said their inventories were too high, 8 percent said their inventories were too low, and 62 percent said their inventories were about right.

The seven industries reporting a feeling that their inventories are too high in April — listed in order — are: Management of Companies & Support Services; Information; Finance & Insurance; Wholesale Trade; Mining; Arts, Entertainment & Recreation; and Accommodation & Food Services. The three industries reporting that their inventories are too low in April are: Utilities; Construction; and Retail Trade. Seven industries reported no change in inventory sentiment in April compared to March.


Inventory Sentiment
%Too
High
%About
Right
%Too
Low

Index
Apr 2012 30 62 8 61.0
Mar 2012 23 71 6 58.5
Feb 2012 29 65 6 61.5
Jan 2012 24 69 7 58.5

About this Report

The data presented herein is obtained from a survey of non-manufacturing supply managers based on information they have collected within their respective organizations. ISM makes no representation, other than that stated within this release, regarding the individual company data collection procedures. Use of the data is in the public domain and should be compared to all other economic data sources when used in decision-making.

Data and Method of Presentation

The Non-Manufacturing ISM Report On Business® is based on data compiled from purchasing and supply executives nationwide. Membership of the Non-Manufacturing Business Survey Committee is diversified by NAICS, based on each industry's contribution to gross domestic product (GDP). The Non-Manufacturing Business Survey Committee responses are divided into the following NAICS code categories: Agriculture, Forestry, Fishing & Hunting; Mining; Utilities; Construction; Wholesale Trade; Retail Trade; Transportation & Warehousing; Information; Finance & Insurance; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Management of Companies & Support Services; Educational Services; Health Care & Social Assistance; Arts, Entertainment & Recreation; Accommodation & Food Services; Public Administration; and Other Services (services such as Equipment & Machinery Repairing; Promoting or Administering Religious Activities; Grantmaking; Advocacy; and Providing Dry-Cleaning & Laundry Services, Personal Care Services, Death Care Services, Pet Care Services, Photofinishing Services, Temporary Parking Services, and Dating Services).

Survey responses reflect the change, if any, in the current month compared to the previous month. For each of the indicators measured (Business Activity, New Orders, Backlog of Orders, New Export Orders, Inventory Change, Inventory Sentiment, Imports, Prices, Employment and Supplier Deliveries), this report shows the percentage reporting each response, and the diffusion index. Responses represent raw data and are never changed. Data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. All seasonal adjustment factors are supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them. The remaining indexes have not indicated significant seasonality.

The NMI (Non-Manufacturing Index) is a composite index based on the diffusion indexes for four of the indicators with equal weights: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted) and Supplier Deliveries. Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change and the scope of change. An index reading above 50 percent indicates that the non-manufacturing economy in that index is generally expanding; below 50 percent indicates that it is generally declining. Supplier Deliveries is an exception. A Supplier Deliveries Index above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries.

The Non-Manufacturing ISM Report On Business® surveys are sent out to Non-Manufacturing Business Survey Committee respondents the first part of each month. Respondents are asked to ONLY report on information for the current month. ISM receives survey responses throughout most of any given month, with the majority of respondents generally waiting until late in the month to submit responses in order to give the most accurate picture of current business activity. ISM then compiles the reports for release on the third business day of the following month.

The industries reporting growth, as indicated in the Non-Manufacturing ISM Report On Business® monthly reports, are listed in the order of most growth to least growth. For the industries reporting contraction or decreases, those are listed in the order of the highest level of contraction/decrease to the least level of contraction/decrease.

The Non-Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management™, the largest supply management research and education organization in the United States. The Institute for Supply Management™, established in 1915, is the largest supply management organization in the world as well as one of the most respected. ISM's mission is to lead the supply management profession through its standards of excellence, research, promotional activities and education.

The full text version of the Non-Manufacturing ISM Report On Business® is posted on ISM's Web site at www.ism.ws on the third business day of every month after 10:10 a.m. (ET).

The next Non-Manufacturing ISM Report On Business® featuring the May 2012 data will be released at 10:00 a.m. (ET) on Tuesday, June 5, 2012.



Back to Top





Rate and Review this item

Rate this item:



Log in to rate or review this item.