NMI(R) at 57.2%; December Non-Manufacturing ISM(R) Report On Business(R); Business Activity Index at 61.4%; New Orders Index at 61.6%; Employment Index at 53.8%

PR Newswire

TEMPE, Ariz., Jan. 5, 2017

TEMPE, Ariz., Jan. 5, 2017 /PRNewswire/ -- Economic activity in the non-manufacturing sector grew in December for the 83rd consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM(R) Report On Business(R) .

The report was issued today by Anthony Nieves, CPSM, C.P.M., CFPM, chair of the Institute for Supply Management(R) (ISM(R) ) Non-Manufacturing Business Survey Committee. "The NMI(R) equaled its 12-month high by registering 57.2 percent in December, matching the November figure. This represents continued growth in the non-manufacturing sector at the same rate. The Non-Manufacturing Business Activity Index decreased to 61.4 percent, 0.3 percentage point lower than the November reading of 61.7 percent, reflecting growth for the 89th consecutive month, at a slightly slower rate in December. The New Orders Index registered 61.6 percent, 4.6 percentage points higher than the reading of 57 percent in November. The Employment Index decreased 4.4 percentage points in December to 53.8 percent from the November reading of 58.2 percent. The Prices Index increased 0.7 percentage point from the November reading of 56.3 percent to 57 percent, indicating prices increased in December for the ninth consecutive month at a slightly faster rate. According to the NMI(R) , 12 non-manufacturing industries reported growth in December. The non-manufacturing sector closed out the year strong, maintaining its rate of month-over-month growth. Respondents' comments are mostly positive about business conditions and the overall economy."

INDUSTRY PERFORMANCE

The 12 non-manufacturing industries reporting growth in December -- listed in order -- are: Mining; Retail Trade; Finance & Insurance; Information; Arts, Entertainment & Recreation; Construction; Other Services; Health Care & Social Assistance; Professional, Scientific & Technical Services; Utilities; Transportation & Warehousing; and Accommodation & Food Services. The three industries reporting contraction in December are: Public Administration; Wholesale Trade; and Agriculture, Forestry, Fishing & Hunting.

WHAT RESPONDENTS ARE SAYING ...

-- "New business slowed a little bit, but we are still growing. The key

headwinds are [the] holiday season and [also] capex [capital

expenditures] tightening due to end of year budgets." (Construction)

-- "Steady with optimism." (Finance & Insurance)

-- "Business is the same and at the same volumes as last month." (Health

Care & Social Assistance)

-- "Very busy end to the 4th Qtr due to customers' year-end spending boost."

(Mining)

-- "Activity seems to be increasing as more potential client inquiries have

been coming in." (Professional, Scientific & Technical Services)

-- "Labor, especially construction labor and construction subcontractors,

continue to be in short supply." (Public Administration)

-- "Sales increasing due to [the] holidays." (Retail Trade)

-- "Distribution of finished goods ahead of last year and forecasts in all

channels. E-commerce [has the] strongest growth." (Transportation &

Warehousing)

ISM(R) NON-MANUFACTURING SURVEY RESULTS AT A GLANCE

COMPARISON OF ISM(R) NON-MANUFACTURING AND ISM(R) MANUFACTURING SURVEYS*

DECEMBER 2016

Index Non-Manufacturing Manufacturing

Series Series Percent Series Series Percent

Index Index Point Rate of Trend** Index Index Point

Dec Nov Change Direction Change (Months) Dec Nov Change

NMI(R)

/PMI(R) 57.2 57.2 0.0 Growing Same 83 54.7 53.2 +1.5

Business

Activity/

Production 61.4 61.7 -0.3 Growing Slower 89 60.3 56.0 +4.3

New Orders 61.6 57.0 +4.6 Growing Faster 89 60.2 53.0 +7.2

Employment 53.8 58.2 -4.4 Growing Slower 7 53.1 52.3 +0.8

Supplier

Deliveries 52.0 52.0 0.0 Slowing Same 12 52.9 55.7 -2.8

Inventories 52.0 51.5 +0.5 Growing Faster 4 47.0 49.0 -2.0

Prices 57.0 56.3 +0.7 Increasing Faster 9 65.5 54.5 +11.0

Backlog of From

Orders 48.0 51.0 -3.0 Contracting Growing 1 49.0 49.0 0.0

New Export

Orders 53.0 57.0 -4.0 Growing Slower 4 56.0 52.0 +4.0

From

Imports 50.0 54.0 -4.0 Unchanged Growing 1 50.5 50.5 0.0

Inventory

Sentiment 61.5 60.5 +1.0 Too High Faster 235 N/A N/A N/A

Customers'

Inventories N/A N/A N/A N/A N/A N/A 49.0 49.0 0.0

Overall Economy

Non-Manufacturing Sector Growing Same 89

Growing Same 83

*Non-Manufacturing ISM(R) Report On Business(R) data is seasonally adjusted for the Business Activity, New Orders, Prices and Employment Indexes. Manufacturing ISM(R) Report On Business(R) data is seasonally adjusted for New Orders, Production, Employment and Supplier Deliveries.

**Number of months moving in current direction.

COMMODITIES REPORTED UP/DOWN IN PRICE, AND IN SHORT SUPPLY

Commodities Up in Price

Copper (3); Corrugated Boxes (2); #1 Diesel Fuel (4); #2 Diesel Fuel; Fuel (2); Gasoline* (3); Labor (3); Medical Supplies; Natural Gas; Paper; Shrimp; Soy Products; Stainless Steel Products; and Steel Products.

Commodities Down in Price

Beef (5); Butter; Cheese; Corn; Gasoline*; and Lumber Products.

Commodities in Short Supply

Lab Supplies; Labor (15); Labor -- Construction (9); and Labor -- Temporary (4).

Note: The number of consecutive months the commodity is listed is indicated after each item.

*Reported as both up and down in price.

DECEMBER 2016 NON-MANUFACTURING INDEX SUMMARIES

NMI(R) In December, the NMI(R) registered 57.2 percent, the same reading registered in November, indicating continued growth in the non-manufacturing sector for the 83rd consecutive month. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.

An NMI(R) above 48.9 percent, over a period of time, generally indicates an expansion of the overall economy. Therefore, the December NMI(R) indicates growth for the 89th consecutive month in the overall economy, and indicates expansion in the non-manufacturing sector for the 83rd consecutive month. Nieves stated, "The past relationship between the NMI(R) and the overall economy indicates that the NMI(R) for December (57.2 percent) corresponds to a 3.3 percent increase in real gross domestic product (GDP) on an annualized basis."

NMI(R) HISTORY

MonthNMI(R) Month NMI(R)

Dec 2016 57.2 Jun 2016 56.5

Nov 2016 57.2 May 2016 52.9

Oct 2016 54.8 Apr 2016 55.7

Sep 2016 57.1 Mar 2016 54.5

Aug 2016 51.4 Feb 2016 53.4

Jul 2016 55.5 Jan 2016 53.5

Average for 12 months -- 55.0

High -- 57.2

Low -- 51.4

Business Activity

ISM(R) 's Business Activity Index in December registered 61.4 percent, a decrease of 0.3 percentage point from the November reading of 61.7 percent. This represents growth in business activity for the 89th consecutive month. Eleven industries reported increased business activity and four industries reported decreased activity for the month of December. Comments from respondents include: "Expanded business base" and "Business activity has remained strong and continues to increase."

The 11 industries reporting growth of business activity in December -- listed in order -- are: Arts, Entertainment & Recreation; Retail Trade; Mining; Information; Construction; Utilities; Health Care & Social Assistance; Transportation & Warehousing; Finance & Insurance; Other Services; and Professional, Scientific & Technical Services. The four industries reporting a decrease in business activity in December are: Educational Services; Public Administration; Wholesale Trade; and Accommodation & Food Services.

Business Activity %Higher %Same %Lower Index

Dec 2016 34 49 17 61.4

Nov 2016 32 55 13 61.7

Oct 2016 29 55 16 57.7

Sep 2016 33 54 13 60.3

New Orders

ISM(R) 's Non-Manufacturing New Orders Index registered 61.6 percent, an increase of 4.6 percentage points from the November reading of 57 percent. December represents growth in new orders for the 89th consecutive month at a faster rate compared to November. Comments from respondents include: "Departments aretrying to spend their budget money before year-end" and "New capital projects being initiated."

The 10 industries reporting growth of new orders in December -- listed in order -- are: Mining; Retail Trade; Finance & Insurance; Utilities; Information; Construction; Professional, Scientific & Technical Services; Health Care & Social Assistance; Accommodation & Food Services; and Other Services. The three industries reporting contraction of new orders in December are: Transportation & Warehousing; Public Administration; and Wholesale Trade.

New Orders %Higher %Same %Lower Index

Dec 2016 33 50 17 61.6

Nov 2016 28 59 13 57.0

Oct 2016 28 56 16 57.7

Sep 2016 33 56 11 60.0

Employment

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January 05, 2017 10:15 ET (15:15 GMT)

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