Economy: ISM Non-Manufacturing Index (NMI®) for January 2022

Earlier today, the Institute for Supply Management (ISM®) released their Non-Manufacturing Index (NMI®) for January 2022:

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Predicted: 60.0%

Actual: 59.9% (-2.4 points month-on-month change)

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Previous month (revised): 62.3%

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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 January for the 20th month in a row, with the Services PMI® registering 59.9%, 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:

"Supply constraints and outages persist. With mechanical component parts, the problems are severe. We are finding widespread depletion of field service part inventories to sustain factory production of new product orders. The inability to satisfy replacement part demand creates tremendous operational risk."
[Accommodation & Food Services]

"Challenging operating conditions remain the same to start the new year. Our biggest service providers seem to be rebounding from labor shortages or are managing their way through them. We will be forced to upgrade some equipment that is less reliant on labor."
[Agriculture, Forestry, Fishing & Hunting]

"Costs have escalated to what we believe are unsustainable levels. Available labor is nonexistent, so we have cut staffing and are taking on fewer projects temporarily in an attempt to reduce cost. Outsourcing where possible. We are not optimistic at this time."
[Construction]

"Business activity is increasing, but professional labor continues to be in short supply. Virtual work is preferred by clients."
[Finance & Insurance]

"COVID-19 inpatient stays have surged in the past 30 days; however, this past week, the numbers have trended slightly down. Supply chain disruptions continue. Hiring of clinical and nonclinical staff continues to be very difficult due to high demand. Some staff are still working remotely."
[Health Care & Social Assistance]

"January has been tough, as product quantities intended for holiday sales are just now coming in, inventories of seasonal products are (very) high and now dormant for nine months, cash flow is down, and new orders are delayed. Omicron is keeping between 20 and 25 percent of our workforce out daily. Inflation is a concern."
[Information]

"Downturn in business in the last month due to outbreak in COVID-19 cases."
[Other Services]

"Blood shortages are causing issues in the emergency rooms."
[Professional, Scientific & Technical Services]

"Business outlook remains cautiously optimistic, although uncertainty remains concerning the impact of omicron, inflation and the lack of major improvements to supply chain issues."
[Retail Trade]

"Business activity is very high, and we have maintained a consistent amount of back orders. Labor constraints are presenting problems throughout all areas of the business."
[Utilities]

"Constrained supplies of many key product groups continue. Inflation worsening; however, sales and profitability continue to be strong."
[Wholesale Trade]

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