FOR RELEASE: July 6, 2011

Contact:

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

NMI at 53.3%

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 2011.

Business Activity Index at 53.4%
New Orders Index at 53.6%
Employment Index at 54.1%

(Tempe, Arizona) — Economic activity in the non-manufacturing sector grew in June for the 19th 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 53.3 percent in June, 1.3 percentage points lower than the 54.6 percent registered in May, and indicating continued growth at a slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased 0.2 percentage point to 53.4 percent, reflecting growth for the 23rd consecutive month, but at a slightly slower rate than in May. The New Orders Index decreased by 3.2 percentage points to 53.6 percent. The Employment Index increased 0.1 percentage point to 54.1 percent, indicating growth in employment for the 10th consecutive month and at a slightly faster rate than in May. The Prices Index decreased 8.7 percentage points to 60.9 percent, indicating that prices increased at a slower rate in June when compared to May. According to the NMI, 15 non-manufacturing industries reported growth in June. Respondents' comments are mixed about the business climate and vary by industry and company. The most prominent concern remains about the volatility of prices."

INDUSTRY PERFORMANCE (Based on the NMI)

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

WHAT RESPONDENTS ARE SAYING ...

• "Business is still up, although some softening seen over last month." (Wholesale Trade)
• "Orders are remaining steady, and outlook for this year is positive." (Professional, Scientific & Technical Services)
• "Economic activity continues to be sluggish." (Management of Companies & Support Services)
• "Have yet to see a real spark that ignites new and invigorated business — still seems lethargic and mired in recession-related preventative moves, and no one sees a real improvement ahead." (Public Administration)
• "Commodities coming down in price, which should help stabilize inflation." (Retail Trade)

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS* JUNE 2011
	Non-Manufacturing						Manufacturing
Index	Series Index Jun	Series Index May	Percent Point Change	Direction	Rate of Change	Trend** (Months)	Series Index Jun	Series Index May	Percent Point Change
NMI/PMI	53.3	54.6	-1.3	Growing	Slower	19	55.3	53.5	+1.8
Business Activity/Production	53.4	53.6	-0.2	Growing	Slower	23	54.5	54.0	+0.5
New Orders	53.6	56.8	-3.2	Growing	Slower	23	51.6	51.0	+0.6
Employment	54.1	54.0	+0.1	Growing	Faster	10	59.9	58.2	+1.7
Supplier Deliveries	52.0	54.0	-2.0	Slowing	Slower	15	56.3	55.7	+0.6
Inventories	53.5	55.0	-1.5	Growing	Slower	5	54.1	48.7	+5.4
Prices	60.9	69.6	-8.7	Increasing	Slower	23	68.0	76.5	-8.5
Backlog of Orders	48.5	55.0	-6.5	Contracting	From Growing	1	49.0	50.5	-1.5
New Export Orders	57.0	57.0	0.0	Growing	Same	10	53.5	55.0	-1.5
Imports	46.5	50.5	-4.0	Contracting	From Growing	1	51.0	54.5	-3.5
Inventory Sentiment	58.5	55.0	+3.5	Too High	Faster	169	N/A	N/A	N/A
Customers' Inventories	N/A	N/A	N/A	N/A	N/A	N/A	47.0	39.5	+7.5

* 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

Airfares (7); Can Liners (3); Cheese; Chemicals (2); Copy Paper; Cotton Products (10); #1 Diesel Fuel* (9); #2 Diesel Fuel* (12); Food & Beverage; Food Products (2); Fuel (18); Fuel Surcharges (6); Gasoline* (9); Gloves; Latex Gloves (6); Paper (8); Petroleum Products (6); Plastic Products (4); Plastics (3); and Polyethylene Film.

Commodities Down in Price

Cotton; #1 Diesel Fuel*; #2 Diesel Fuel*; and Gasoline*.

Commodities in Short Supply

Fiber Optic Products; Medical Supplies; Plastic Products; Plenum Cable; and Tires.

Note: The number of consecutive months the commodity is listed is indicated after each item.
*Reported as both up and down in price.

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JUNE 2011 NON-MANUFACTURING INDEX SUMMARIES

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NMI

In June, the NMI registered 53.3 percent, indicating continued growth in the non-manufacturing sector for the 19th 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
Jun 2011	53.3	Dec 2010	57.1
May 2011	54.6	Nov 2010	56.0
Apr 2011	52.8	Oct 2010	54.6
Mar 2011	57.3	Sep 2010	53.9
Feb 2011	59.7	Aug 2010	52.8
Jan 2011	59.4	Jul 2010	53.7
Average for 12 months – 55.4 High – 59.7 Low – 52.8

Business Activity

ISM's Non-Manufacturing Business Activity Index in June registered 53.4 percent, a decrease of 0.2 percentage point when compared to the 53.6 percent registered in May. Ten industries reported increased business activity, and five industries reported decreased activity for the month of June. Comments from respondents include: "More consumer sales" and "Planned capital expenditures."

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

Business Activity	% Higher	% Same	% Lower	Index
Jun 2011	33	50	17	53.4
May 2011	29	57	14	53.6
Apr 2011	34	54	12	53.7
Mar 2011	37	52	11	59.7

New Orders

ISM's Non-Manufacturing New Orders Index grew in June for the 23rd consecutive month. The index registered 53.6 percent, a decrease of 3.2 percentage points from the 56.8 percent reported in May. Comments from respondents include: "Higher level of spending due to more budgets approved for this fiscal year" and "Increase in national accounts business."

The 11 industries reporting growth of new orders in June — listed in order — are: Real Estate, Rental & Leasing; Transportation & Warehousing; Educational Services; Arts, Entertainment & Recreation; Wholesale Trade; Accommodation & Food Services; Professional, Scientific & Technical Services; Mining; Other Services; Public Administration; and Management of Companies & Support Services. The four industries reporting contraction of new orders in June are: Agriculture, Forestry, Fishing & Hunting; Finance & Insurance; Retail Trade; and Health Care & Social Assistance.

New Orders	% Higher	% Same	% Lower	Index
Jun 2011	28	56	16	53.6
May 2011	32	54	14	56.8
Apr 2011	34	52	14	52.7
Mar 2011	36	55	9	64.1

Employment

Employment activity in the non-manufacturing sector grew in June, as ISM's Non-Manufacturing Employment Index registered 54.1 percent. This reflects an increase of 0.1 percentage point when compared to the 54 percent registered in May. Fourteen industries reported increased employment, three industries reported decreased employment, and one industry reported unchanged employment compared to May. Comments from respondents include: "Continuing to fill backlog of positions" and "Hiring to get back to required staffing levels."

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

Employment	% Higher	% Same	% Lower	Index
Jun 2011	27	61	12	54.1
May 2011	28	63	9	54.0
Apr 2011	26	63	11	51.9
Mar 2011	22	65	13	53.7

Supplier Deliveries

The Supplier Deliveries Index registered 52 percent in June, 2 percentage points lower than the 54 percent registered in May, indicating that supplier deliveries continued to slow in June. A reading above 50 percent indicates slower deliveries.

The seven industries reporting slower deliveries in June — listed in order — are: Retail Trade; Construction; Wholesale Trade; Utilities; Educational Services; Other Services; and Professional, Scientific & Technical Services. The three industries reporting faster supplier deliveries in June are: Finance & Insurance; Health Care & Social Assistance; and Transportation & Warehousing. Eight industries reported no change in supplier deliveries for the month of June compared to May.

Supplier Deliveries	% Slower	% Same	% Faster	Index
Jun 2011	9	86	5	52.0
May 2011	14	80	6	54.0
Apr 2011	10	86	4	53.0
Mar 2011	6	91	3	51.5

Inventories

ISM's Non-Manufacturing Inventories Index registered 53.5 percent in June, 1.5 percentage points lower than the 55 percent reading that was reported in May. Of the total respondents in June, 29 percent indicated they do not have inventories or do not measure them. Comments from respondents include: "Working down inventory to desired level" and "Reducing non-performing inventory."

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

Inventories	% Higher	% Same	% Lower	Index
Jun 2011	23	61	16	53.5
May 2011	26	58	16	55.0
Apr 2011	20	71	9	55.5
Mar 2011	20	71	9	55.5

Prices

Prices paid by non-manufacturing organizations for purchased materials and services increased in June. ISM's Non-Manufacturing Prices Index for June registered 60.9 percent, 8.7 percentage points lower than the 69.6 percent reported in May. In June, the percentage of respondents reporting higher prices is 35 percent, the percentage indicating no change in prices paid is 58 percent, and 7 percent of the respondents reported lower prices.

Sixteen non-manufacturing industries reported an increase in prices paid, in the following order: Real Estate, Rental & Leasing; Accommodation & Food Services; Arts, Entertainment & Recreation; Mining; Wholesale Trade; Professional, Scientific & Technical Services; Management of Companies & Support Services; Transportation & Warehousing; Health Care & Social Assistance; Finance & Insurance; Utilities; Educational Services; Other Services; Retail Trade; Construction; and Public Administration. The only industry reporting a decrease in prices paid is Information.

Prices	% Higher	% Same	% Lower	Index
Jun 2011	35	58	7	60.9
May 2011	53	42	5	69.6
Apr 2011	57	41	2	70.1
Mar 2011	51	47	2	72.1

Backlog of Orders

ISM's Non-Manufacturing Backlog of Orders Index contracted in June after five consecutive months of growth. The index registered 48.5 percent, 6.5 percentage points lower than the 55 percent reported in May. Of the total respondents in June, 43 percent indicated they do not measure backlog of orders.

The five industries reporting an increase in order backlogs in June are: Construction; Retail Trade; Other Services; Health Care & Social Assistance; and Wholesale Trade. The five industries reporting lower backlog of orders in June are: Utilities; Information; Professional, Scientific & Technical Services; Mining; and Finance & Insurance. Eight industries reported no change in order backlogs for the month of June compared to May.

Backlog of Orders	% Higher	% Same	% Lower	Index
Jun 2011	12	73	15	48.5
May 2011	18	74	8	55.0
Apr 2011	20	71	9	55.5
Mar 2011	20	72	8	56.0

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 June. The New Export Orders Index for June registered 57 percent, which is the same as registered in May and is the 10th consecutive month of growth in the index. Of the total respondents in June, 69 percent indicated they either do not perform, or do not separately measure, orders for work outside of the United States.

The seven industries reporting an increase in new export orders in June — listed in order — are: Arts, Entertainment & Recreation; Construction; Other Services; Transportation & Warehousing; Finance & Insurance; Professional, Scientific & Technical Services; and Wholesale Trade. The two industries reporting a decrease in export orders in June are: Information and Retail Trade. Six industries reported no change in new export orders for the month of June compared to May.

New Export Orders	% Higher	% Same	% Lower	Index
Jun 2011	20	74	6	57.0
May 2011	20	74	6	57.0
Apr 2011	20	67	13	53.5
Mar 2011	26	66	8	59.0

Imports

The ISM Non-Manufacturing Imports Index contracted in June after 10 consecutive months of growth. The index registered 46.5 percent, which is 4 percentage points lower than the 50.5 percent reported in May. Sixty-five percent of respondents reported that they do not use, or do not track, the use of imported materials.

The three industries reporting an increase in the use of imports in June are: Transportation & Warehousing; Arts, Entertainment & Recreation; and Other Services. The four industries reporting a decrease in imports for the month of June are: Information; Agriculture, Forestry, Fishing & Hunting; Wholesale Trade; and Retail Trade. Eight industries reported no change in imports for the month of June compared to May.

Imports	% Higher	% Same	% Lower	Index
Jun 2011	6	81	13	46.5
May 2011	11	79	10	50.5
Apr 2011	19	76	5	57.0
Mar 2011	11	78	11	50.0

Inventory Sentiment

The ISM Non-Manufacturing Inventory Sentiment Index in June registered 58.5 percent, which is 3.5 percentage points higher than the 55 percent reported in May. This indicates that respondents believe their inventories are still too high at this time. In June, 24 percent of respondents said their inventories were too high, 7 percent said their inventories were too low, and 69 percent said their inventories were about right.

The six industries reporting a feeling that their inventories are too high in June — listed in order — are: Management of Companies & Support Services; Information; Finance & Insurance; Other Services; Wholesale Trade; and Accommodation & Food Services. The only industry reporting that inventories are too low in June is Public Administration. Ten industries reported no change in inventory sentiment in June compared to May.

Inventory Sentiment	%Too High	%About Right	%Too Low	Index
Jun 2011	24	69	7	58.5
May 2011	23	64	13	55.0
Apr 2011	21	73	6	57.5
Mar 2011	37	60	3	67.0

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^® 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 2011 data will be released at 10:00 a.m. (ET) on Wednesday, August 3, 2011.

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