NMI(R) at 54.8%; October Non-Manufacturing ISM(R) Report On Business(R); Business Activity Index at 57.7%; New Orders Index at 57.7%; Employment Index at 53.1%

PR Newswire

TEMPE, Ariz., Nov. 3, 2016

TEMPE, Ariz., Nov. 3, 2016 /PRNewswire/ -- Economic activity in the non-manufacturing sector grew in October for the 81st 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) registered54.8 percent in October, 2.3 percentage points lower than the September reading of 57.1 percent. This represents continued growth in the non-manufacturing sector at a slower rate. The Non-Manufacturing Business Activity Index decreased to 57.7 percent, 2.6 percentage points lower than the September reading of 60.3 percent, reflecting growth for the 87th consecutive month, at a slower rate in October. The New Orders Index registered 57.7 percent, 2.3 percentage points lower than the reading of 60 percent in September. The Employment Index decreased 4.1 percentage points in October to 53.1 percent from the September reading of 57.2 percent. The Prices Index increased 2.6 percentage points from the September reading of 54 percent to 56.6 percent, indicating prices increased in October for the seventh consecutive month. According to the NMI(R) , 13 non-manufacturing industries reported growth in October. There has been a slight cooling off in the non-manufacturing sector month-over-month, indicating that last month's increases weren't sustainable. Respondent's comments remain mostly positive about business conditions and the overall economy. Several comments were made about the uncertainty on the impact of the upcoming U.S. presidential election."

SPECIAL QUESTION

We asked a special question of our committee members as to what has been the impact of the Hanjin Shipping bankruptcy on business for their respective organizations. The breakdown of those responses is as follows:

-- Not impacted -- 68.5%

-- Small, not a material impact -- 17.1%

-- Material, but manageable impact -- 6.9%

-- Large material impact -- 0%

-- Unsure -- 7.4%

INDUSTRY PERFORMANCE

The 13 non-manufacturing industries reporting growth in October -- listed in order -- are: Transportation & Warehousing; Construction; Other Services; Management of Companies & Support Services; Information; Professional, Scientific & Technical Services; Real Estate, Rental & Leasing; Wholesale Trade; Utilities; Finance & Insurance; Retail Trade; Accommodation & Food Services; and Health Care & Social Assistance. The five industries reporting contraction in October are: Educational Services; Mining; Agriculture, Forestry, Fishing & Hunting; Public Administration; and Arts, Entertainment & Recreation.

WHAT RESPONDENTS ARE SAYING ...

-- "Food industry is reeling from high avocado pricing due to a labor

dispute between packers and growers. We've seen case prices rise to as

much as $100 for standard 48 count. Otherwise, commodities have remained

as usual given the transition to seasonal growing regions."

(Accommodation & Food Services)

-- "We secured lots of new clients, and business in our division is

booming." (Construction)

-- "Slight decline for this time of year. Seeing price reductions aswell."

(Arts, Entertainment & Recreation)

-- "Economy is becoming stabilized. All segments doing fairly well."

(Finance & Insurance)

-- "Uncertainty as to the ongoing status of the Affordable Care Act and the

impact it is having on individual costs." (Health Care & Social

Assistance)

-- "There has been an overall stall in momentum as many clients begin to

approach busy seasons." (Professional, Scientific & Technical Services)

-- "Sales remain steady." (Retail Trade)

-- "Increasing pressure to drive down cost of goods purchased."

(Transportation & Warehousing)

-- "Steady work continuing in fourth quarter." (Utilities)

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

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

OCTOBER 2016

Index Non-Manufacturing Manufacturing

Series Series Percent Rate Series Series

Index Index Point of Trend** Index Index Percent Point

Oct Sep Change Direction Change (Months) Oct Sep Change

NMI(R)

/PMI(R) 54.8 57.1 -2.3 Growing Slower 81 51.9 51.5 +0.4

Business

Activity/

Production 57.7 60.3 -2.6 Growing Slower 87 54.6 52.8 +1.8

New Orders 57.7 60.0 -2.3 Growing Slower 87 52.1 55.1 -3.0

Employment 53.1 57.2 -4.1 Growing Slower 5 52.9 49.7 +3.2

Supplier

Deliveries 50.5 51.0 -0.5 Slowing Slower 10 52.2 50.3 +1.9

Inventories 52.0 51.5 +0.5 Growing Faster 2 47.5 49.5 -2.0

Prices 56.6 54.0 +2.6 Increasing Faster 7 54.5 53.0 +1.5

Backlog of

Orders52.0 52.0 0.0 Growing Same 2 45.5 49.5 -4.0

New Export

Orders 55.5 56.5 -1.0 Growing Slower 2 52.5 52.0 +0.5

Imports 53.0 51.0 +2.0 Growing Faster 9 52.0 49.0 +3.0

Inventory

Sentiment 62.0 64.5 -2.5 Too High Slower 233 N/A N/A N/A

Customers'

Inventories N/A N/A N/A N/A N/A N/A 49.5 53.0 -3.5

Overall Economy

Non-Manufacturing Sector Growing Slower 87

Growing Slower 81

*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

Beef*; Copper; Dairy (4); #1 Diesel Fuel (2); #2 Diesel Fuel (5); Envelopes; Gasoline; Labor; Labor -- Construction; and Paper (2).

Commodities Down in Price

Beef* (3); Cheese; DDGS; Pork; Poultry; and Steel Products.

Commodities in Short Supply

Avocados; Labor (13); Labor -- Construction (7); Labor -- Temporary (2); and Shingles (2).

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

*Reported as both up and down in price.

OCTOBER 2016 NON-MANUFACTURING INDEX SUMMARIES

NMI(R) In October, the NMI(R) registered 54.8 percent, a decrease of 2.3 percentage points when compared to the September reading of 57.1 percent, indicating continued growth in the non-manufacturing sector for the 81st 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 October NMI(R) indicates growth for the 87th consecutive month in the overall economy, and indicates expansion in the non-manufacturing sector for the 81st consecutive month. Nieves stated, "The past relationship between the NMI(R) and the overall economy indicates that the NMI(R) for October (54.8 percent) corresponds to a 2.3 percent increase in real gross domestic product (GDP) on an annualized basis."

NMI(R) HISTORY

Month NMI(R) Month NMI(R)

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

Jun 2016 56.5 Dec 2015 55.8

May 2016 52.9 Nov 2015 56.6

Average for 12 months -- 54.8

High -- 57.1Low -- 51.4

Business Activity

ISM(R) 's Business Activity Index in October registered 57.7 percent, a decrease of 2.6 percentage points from the September reading of 60.3 percent. This represents growth in business activity for the 87th consecutive month. Eleven industries reported increased business activity and four industries reported decreased activity for the month of October. Comments from respondents include: "Projects that were on hold were released" and "Consumer spending seems to be up over last year, same period."

The 11 industries reporting growth of business activity in October -- listed in order -- are: Utilities; Transportation & Warehousing; Information; Construction; Wholesale Trade; Management of Companies & Support Services; Accommodation & Food Services; Professional, Scientific & Technical Services; Other Services; Finance & Insurance; and Retail Trade. The four industries reporting a decrease in business activity in October are: Educational Services; Agriculture, Forestry, Fishing & Hunting; Mining; and Public Administration.

Business Activity %Higher %Same %Lower Index

Oct 2016 29 55 16 57.7

Sep 2016 33 54 13 60.3

Aug 2016 24 58 18 51.8

Jul 2016 35 52 13 59.3

New Orders

ISM(R) 's Non-Manufacturing New Orders Index registered 57.7 percent, a decrease of 2.3 percentage points from the September reading of 60 percent. October represents growth in new orders for the 87th consecutive month and at a slower rate compared to September. Comments from respondents include: "Awarded new contracts" and "Acquisitions -- organic growth."

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November 03, 2016 10:15 ET (14:15 GMT)

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