More good news on the economic front shows growth and strength even outside the encouraging sector of manufacturing. The Institute for Supply Management (ISM has released their Non-Manufacturing Report on Business indices since January 2008. August of this year showed some of the highest readings since the report was launched. The indices used to measure growth by ISM is the NMI (Non-Manufacturing Index).
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All four measurements of the indices were up, with the NMI showing its strongest ever growth in the history of the index at 58.6, a 2.6 percent gain over July’s reading of 56. Any reading over 50 indicates growth in that area. The average of the index over the past 12 months has been 55. The NMI has seen gains during the past 44 months.
In addition to the NMI, the report showed Business Activity and Production were up 1.8 percent to 62.2. This is the highest reading on record since the 63.5 reading of February 2011. New Orders was also up to 60.5, a gain of 2.8 percent. Employment increased to 57, a gain of 3.8 percent. Prices fell 6.7 percent to 53.4. Suppliers’ Deliveries rose two percent and Suppliers Inventories gained 2.5 percent.
According to Tony Nieves, ISM’s chair of the Non-Manufacturing Business Survey Committee, two straight months of gains looks more like a trend than a fluke, and August’s readings are the second consecutive months of gains following positive readings in July. Nieves would like to see the trend continue for at least three to four months before getting too excited, but did say that the two month gain was encouraging news.
Perhaps the most encouraging signs are those readings by the ISM index above 60, such as Business Activity and Production and New Orders. Nieves says that it is unusual to see all four sections of the indices up, without a single one showing a setback. [/show_to]
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