Economy: ISM Non-Manufacturing Index (NMI®) for February 2020

Earlier today, the Institute for Supply Management (ISM®) released their Non-Manufacturing Index (NMI®) for February 2020:

Predicted: 55.0%

Actual: 57.3% (+1.8 points month-on-month change)

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Previous month: 55.5%

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The NMI is a reliable barometer of the U.S. services sector; above 50% implies expansion, while a reading below 50% implies that the services sector contracted.

Service Categories Include: 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).

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From today' report:

"...Economic activity in the non-manufacturing sector grew in February for the 121st consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®..."

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Here's a sampling of comments made by survey participants:

“[The] coronavirus has increased lead times for the critical items.”
(Construction)

“[First-quarter numbers] are slightly behind projections, but still positive.”
(Finance & Insurance)

“Because of the coronavirus, we are looking at major back-orders in masks, gloves, and PPE (personal protection equipment). A lot of the masks are manufactured in China, so not only are we facing a shortage because of the virus, there is a drastic shortage because the masks are manufactured where the virus originated.”
(Health Care & Social Assistance)

“Business is rapidly improving.”
(Management of Companies & Support Services)

“The business outlook remains positive, but foggy due to the Chinese coronavirus outbreak. The mining industry is well dependent on Chinese consumption. On the other side, it is difficult to [make] sourcing decisions, since it is not clear how long China will need to return to normal production capacity, and if it is worth it to pay more from other countries.”
(Mining)

“The outlook appears positive, as our order book is nearing full capacity for the first half of 2020.”
(Professional, Scientific & Technical Services)

“Construction activity appears to be getting off to a good start for 2020.”
(Real Estate, Rental & Leasing)

“A post-holiday slow period for retail. Business is strong overall; however, volume and inventories are lower due to the season. Pricing is still in check, with specialty labor the primary price risk.”
(Retail Trade)

“A shortage of workers at several levels is impacting the quality of employees we are looking to hire for capital projects we need to start.”
(Transportation & Warehousing)

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