FOR RELEASE: July 5, 2007

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

Business Activity at 60.7%

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 June 2007.

New Orders Index at 56.9%
Employment Index at 55%

(Tempe, Arizona) — Business activity in the non-manufacturing sector increased at a faster rate in June 2007, 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; and senior vice president — supply management for Hilton Hotels Corporation. "Non-manufacturing business activity increased for the 51st consecutive month in June," Nieves said. He added, "Business Activity and Employment increased at a faster rate in June than in May. The Business Activity Index registered 60.7 percent, the highest since April 2006 when it registered 61.1 percent. The New Orders index decreased to 56.9 percent, and the Prices Index decreased to 65.5 percent in June, both indicating growth at a slower rate than in May. Fourteen non-manufacturing industries reported increased activity in June. Members' comments in June are mostly positive about business conditions. The overall indication in June is continued economic growth in the non-manufacturing sector at a faster pace than in May."

TOP PERFORMING INDUSTRIES

The 14 industries reporting growth in June — listed in order — are: Construction; Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Other Services*; Accommodation & Food Services; Finance & Insurance; Educational Services; Public Administration; Utilities; Retail Trade; Management of Companies & Support Services; Information; Health Care & Social Assistance; and Wholesale Trade. There are no industries reporting decreased activity from May to June.

WHAT RESPONDENTS ARE SAYING ...

• "Business remains steady and as predicted." (Construction)
• "General business is on the rise with good rates holding through the Q2 period." (Real Estate, Rental & Leasing)
• "Although business this month is better than last month, business in 2007 has been worse than business in 2006." (Retail Trade)
• "In general business is stable." (Agriculture, Forestry, Fishing & Hunting)
• "Fuel prices remain high with many vendors adding a fuel surcharge." (Professional, Scientific & Technical Services)

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS* JUNE 2007
	Non-Manufacturing						Manufacturing
Index	Series Index June	Series Index May	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index June	Series Index May	Percent Point Change
Business Activity/Production	60.7	59.7	+1.0	Growing	Faster	51	62.9	58.3	+4.6
New Orders	56.9	57.4	-0.5	Growing	Slower	51	60.3	59.6	+0.7
Employment	55.0	54.9	+0.1	Growing	Faster	35	51.1	51.9	-0.8
Supplier Deliveries	50.5	49.5	+1.0	Slowing	From Faster	1	49.7	50.3	-0.6
Inventories	52.5	61.0	-8.5	Growing	Slower	5	45.3	46.1	-0.8
Prices	65.5	66.4	-0.9	Increasing	Slower	49	68.0	71.0	-3.0
Backlog of Orders	46.5	48.0	-1.5	Contracting	Faster	2	53.5	52.5	+1.0
New Export Orders	59.0	66.0	-7.0	Growing	Slower	3	56.0	59.0	-3.0
Imports	57.5	55.5	+2.0	Growing	Faster	3	54.5	57.5	-3.0
Inventory Sentiment	60.5	61.0	-0.5	"Too High"	Slower	121	N/A	N/A	N/A
Customers' Inventories	N/A	N/A	N/A				47.0	48.0	-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, Supplier Deliveries and Inventories.
** Number of months moving in current direction

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

Commodities Up in Price

Building Materials (2); Car Rentals (2); Car Service; Cheese; Contract Labor; Copper Wire; Corrugated; #1 Diesel Fuel* (4); #2 Diesel Fuel* (4); Electricity; Fuel (5); Fuel Surcharges; Gasoline* (8); Hotel Costs (13); Paper (41); Paper Products (3); Poly Bags; Postal Rates; and Roofing.

Commodities Down in Price

Diesel Fuel* and Gasoline*.

Commodities in Short Supply

The only commodity reported in short supply is Construction Services/Contractors (4).

*Reported both Up and Down in price.

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

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JUNE 2007 NON-MANUFACTURING INDEX SUMMARIES

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Business Activity

ISM's Non-Manufacturing Business Activity Index in June registered 60.7 percent compared to the 59.7 percent registered in May, indicating a faster rate of growth in business activity in June. The implication is that non-manufacturing business activity is continuing to increase for the 51st consecutive month. Fourteen industries reported increased business activity, and no industry reported decreased activity for the month of June.

The industries reporting growth of business activity in June are: Construction; Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Other Services*; Accommodation & Food Services; Finance & Insurance; Educational Services; Public Administration; Utilities; Retail Trade; Management of Companies & Support Services; Information; Health Care & Social Assistance; and Wholesale Trade.

Business Activity	% Higher	% Same	% Lower	Index
June 2007	40	49	11	60.7
May 2007	39	46	15	59.7
April 2007	37	48	15	56.0
March 2007	30	52	18	52.4

THE LAST 12 MONTHS
Month	Business Activity Index		Month	Business Activity Index
Jun 2007	60.7		Dec 2006	56.7
May 2007	59.7		Nov 2006	58.3
Apr 2007	56.0		Oct 2006	57.4
Mar 2007	52.4		Sep 2006	54.6
Feb 2007	54.3		Aug 2006	56.9
Jan 2007	59.0		Jul 2006	55.7
Average for 12 months — 56.8 High — 60.7 Low — 52.4

New Orders

ISM's Non-Manufacturing New Orders Index decreased to 56.9 percent in June from the 57.4 percent registered in May. This indicates continued expansion of new orders but at a slower rate than in May. Comments from members include: "New customer programs" and "Slight seasonal increase."

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

New Orders	% Higher	% Same	% Lower	Index
June 2007	34	52	14	56.9
May 2007	33	54	13	57.4
April 2007	33	53	14	55.5
March 2007	31	48	21	53.8

Employment

Employment activity in the non-manufacturing sector increased at a slightly faster rate in June compared to May. This was the 35th consecutive monthly increase in non-manufacturing employment. ISM's Non-Manufacturing Employment Index for June is 55 percent, a 0.1 percentage point increase from the 54.9 percent reported in May. Fourteen industries reported increased employment, two reported a decrease, and two indicated employment is unchanged from May. Comments from respondents include: "More stores"; "Continued expansion of business"; and "Still hiring to support new projects."

The industries reporting growth in employment in June are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Transportation & Warehousing; Agriculture, Forestry, Fishing & Hunting; Retail Trade; Management of Companies & Support Services; Finance & Insurance; Utilities; Professional, Scientific & Technical Services; Accommodation & Food Services; Information; Educational Services; Wholesale Trade; and Health Care & Social Assistance. The two industries reporting a reduction in employment in June are: Mining and Public Administration.

Employment	% Higher	% Same	% Lower	Index
June 2007	24	67	9	55.0
May 2007	23	68	9	54.9
April 2007	19	69	12	51.9
March 2007	17	69	14	50.8

Supplier Deliveries

In June, the delivery performance of suppliers to non-manufacturing organizations was slower than in May. The index registered 50.5 percent, 1 percentage point higher than in May. A reading above 50 percent indicates slower deliveries.

The industries reporting slowing in supplier deliveries in June are: Transportation & Warehousing; Educational Services; Public Administration; Utilities; Wholesale Trade; and Professional, Scientific & Technical Services. The industries reporting faster supplier deliveries in June are: Arts, Entertainment & Recreation; Construction; and Information.

Supplier Deliveries	% Slower	% Same	% Faster	Index
June 2007	8	85	7	50.5
May 2007	7	85	8	49.5
April 2007	9	84	7	51.0
March 2007	8	84	8	50.0

Inventories

ISM's Non-Manufacturing Inventories Index registered 52.5 percent in June, indicating that inventories are growing at slower rate compared to May. Inventories are expanding for the fifth consecutive month after one month of contraction in January 2007. Of the total respondents in June, 28 percent indicated they do not have inventories or do not measure them. Comments from members include: "Reduced business levels"; "Planned constraints"; and "We are working very hard to reduce our inventory position and increase our turns."

The industries reporting increases in inventories in June are: Arts, Entertainment & Recreation; Retail Trade; Management of Companies & Support Services; Transportation & Warehousing; Utilities; Information; Finance & Insurance; Wholesale Trade; and Accommodation & Food Services. The industries reporting decreases in inventories in June are: Other Services*; Professional, Scientific & Technical Services; Construction; and Health Care & Social Assistance.

Inventories	% Higher	% Same	% Lower	Index
June 2007	21	63	16	52.5
May 2007	29	64	7	61.0
April 2007	17	70	13	52.0
March 2007	24	56	20	52.0

Prices

Prices paid by non-manufacturing organizations for purchased materials and services increased in June for the 49th consecutive month. ISM's Non-Manufacturing Prices Index for June is 65.5 percent, 0.9 percentage point lower than May's index of 66.4 percent. In June, the percentage of respondents reporting higher prices decreased by 6 percentage points to 35 percent as compared to May. The percentage indicating no change increased from 55 percent in May to 62 percent in June. The percentage of respondents noting lower prices decreased by 1 percent to 3 percent in June.

The industries reporting an increase in prices paid in June are: Management of Companies & Support Services; Accommodation & Food Services; Real Estate, Rental & Leasing; Educational Services; Wholesale Trade; Arts, Entertainment & Recreation; Utilities; Finance & Insurance; Health Care & Social Assistance; Professional, Scientific & Technical Services; Retail Trade; Construction; and Public Administration. The one industry reporting a decrease in prices in June is Information.

Prices	% Higher	% Same	% Lower	Index
June 2007	35	62	3	65.5
May 2007	41	55	4	66.4
April 2007	42	54	4	63.5
March 2007	38	58	4	63.3

Backlog of Orders

ISM's Non-Manufacturing Backlog of Orders Index registered 46.5 percent in June, 1.5 percentage points lower than the 48 percent reported in May. Of the total respondents in June, 45 percent indicated they do not measure backlog of orders. Purchasing and supply executives' comments include: "Minimal new orders" and "Eating up backlog."

The industries reporting an increase in order backlogs in June are: Transportation & Warehousing; Educational Services; Other Services*; Information; and Public Administration. The industries reporting lower backlog of orders in June are: Management of Companies & Support Services; Construction; Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; Professional, Scientific & Technical Services; and Health Care & Social Assistance.

Backlog of Orders	% Higher	% Same	% Lower	Index
June 2007	14	65	21	46.5
May 2007	13	70	17	48.0
April 2007	20	60	20	50.0
March 2007	20	65	15	52.5

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 in June increased for the third consecutive month after a month of contraction. The New Export Orders Index for June is 59 percent, compared to May's index of 66 percent. Of the total respondents in June, 73 percent indicated they either do not perform, or do not separately measure, orders for work outside of the United States.

The industries reporting an increase in new export orders in June are: Mining; Management of Companies & Support Services; Arts, Entertainment & Recreation; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Finance & Insurance; and Wholesale Trade. The one industry reporting a decrease in export orders is Public Administration.

New Export Orders	% Higher	% Same	% Lower	Index
June 2007	26	66	8	59.0
May 2007	36	60	4	66.0
April 2007	23	65	12	55.5
March 2007	18	61	21	48.5

Imports

In June, the ISM Non-Manufacturing Imports Index registered 57.5 percent, 2 percentage points higher than May's index of 55.5 percent, indicating that use of imports increased in June when compared to May. In June, 62 percent of respondents reported that they do not use, or do not track, the use of imported materials.

The industries reporting an increase in the use of imports in June are: Finance & Insurance; Management of Companies & Support Services; Arts, Entertainment & Recreation; Other Services*; Utilities; Health Care & Social Assistance; Retail Trade; and Wholesale Trade. The one industry reporting a decrease in imports for the month of June is Public Administration.

Imports	% Higher	% Same	% Lower	Index
June 2007	24	67	9	57.5
May 2007	17	77	6	55.5
April 2007	18	69	13	52.5
March 2007	13	74	13	50.0

Inventory Sentiment

The ISM Non-Manufacturing Inventory Sentiment Index in June registered 60.5 percent, 0.5 percentage point lower than the 61 percent reported in May. This indicates that non-manufacturing purchasing and supply executives feel a little less discomfort with current levels of inventory in June than they did during May. In June, 23 percent of respondents felt their inventories were too high, 2 percent indicated their inventories were too low, and 75 percent said that their inventories were about right.

The industries reporting a feeling that their inventories are too high in June are: Wholesale Trade; Other Services*; Transportation & Warehousing; Management of Companies & Support Services; Construction; Public Administration; Retail Trade; Information; Finance & Insurance; and Professional, Scientific & Technical Services. The one industry reporting that their inventories are too low is Real Estate, Rental & Leasing.

Inventory Sentiment	%Too High	%About Right	%Too Low	Index
June 2007	23	75	2	60.5
May 2007	26	70	4	61.0
April 2007	27	67	6	60.5
March 2007	32	62	6	63.0

*Other Services include:
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.

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; Other Services*; and Public Administration.

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, the net difference between the number of responses in the positive economic direction (higher and slower for Supplier Deliveries) and the negative economic direction (lower and faster for Supplier Deliveries). Responses represent raw data and are never changed. Data is seasonally adjusted for Business Activity, New Orders, Prices and Employment. The remaining indexes have not indicated significant seasonality.

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® 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 July 2007 data will be released at 10:00 a.m. (ET) on Friday, August 3, 2007.

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