Economy: ISM Non-Manufacturing Index (NMI®) for July 2021

Earlier today, the Institute for Supply Management (ISM®) released their Non-Manufacturing Index (NMI®) for July 2021:

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Predicted: 65.0%

Actual: 64.1% (+4.0 points month-on-month change)

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Previous month: 60.1%

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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 services sector grew in July for the 14th month in a row, say the nation’s purchasing and supply executives in the latest Services ISM® Report On Business®..."

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

"Peak demand while still facing challenges filling open positions."
[Accommodation & Food Services]

"The slow movement of container traffic has definitely impacted our business in the first half of the year. We expect the situation will take another year to correct itself."
[Agriculture, Forestry, Fishing & Hunting]

"Costs have risen dramatically in the last 45 days. Lodging, fuel, travel and supplies are all rising sharply. Costs for available labor are also rising, as demand increases in a diminished labor pool."
[Construction]

"Surgical volumes continue to increase, reflecting pent-up demand for services. However, the COVID-19 delta variant is impeding our ability to manage increased surgical volumes due to increased COVID-19 case admissions. Consistency of supply in a couple of categories (coagulation tubes and nitrile gloves) remains challenging, though moderately manageable."
[Health Care & Social Assistance]

"Fuel prices are coming back down a bit. Labor shortage continues for drivers and general labor work. We have increased pay for many positions, but the shortage continues."
[Management of Companies & Support Services]

"Supply chain disruptions continue to impact sales."
[Professional, Scientific & Technical Services]

"Appliances, laptops and certain chemicals are still in short supply."
[Public Administration]

"Business continues to gain speed as the economy recovers and assuming there won’t be additional government-mandated lockdowns."
[Real Estate, Rental & Leasing]

"Continued shortages in computer equipment (laptops and PCs) are challenging for fulfillment needs. Corporate travel has resumed, but we’re seeing many flight cancellations and car-rental shortages. Heating, ventilation and air conditioning (HVAC) repairs also impacted by longer than normal lead times for replacement units."
[Retail Trade]

"Ocean freight costs have created a negative impact to our business. The congestions at (the ports of) Long Beach/Los Angeles and Seattle have increased lead time by 15 days. Additional delays are occurring at the Chicago rail yard, (causing) two to three weeks of additional lead time."
[Wholesale Trade]

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