ISM Non-Manufacturing Index

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ISM Non-Manufacturing Index since 2008The ISM Non-Manufacturing Index helps determine the overall economic strength of the services sector.  Components evaluated are employment, business activity, new orders, and supplier deliveries; which are then compiled into an index.  The non-manufacturing sector represents a much larger share of the overall U.S. economy when compared to the manufacturing sector, making up approximately 80%; the sector’s economic weight makes it an important sign of growth, stagnation, or contraction. Readings above 50 indicate an expansion while readings below 50 signal decline.

In November, ISM Non-Manufacturing fell by 0.8 points to 54.7. It is down 10.8% from November of 2018.

November’s reading of above 50 continues to show solid long-term growth in the non-manufacturing sector. This month, we saw widespread growth across twelve of the seventeen different service sectors. New orders grew even though business activity slowed, which suggests that the coming non-manufacturing indices should be higher than this month. It should be noted that employment growth is steady, as evidenced by non-farm payrolls and unemployment, so skilled workers in the non-manufacturing space are retaining their current jobs, thus evidencing the strength of the service industry.

ISM Non-Manufacturing Index