Non-Manufacturing Services ISM Fails to Meet Expectations; New Orders Plunge

Wednesday, July 3, 2013
The June 2013 Non-Manufacturing ISM Report On Business® shows a slowing in NMI™ to 52.2%, well below the Bloomberg NMI consensus figure of 54.5%.

ISM at a Glance

IndexJuneMayPercentage Point ChangeDirectionRate of ChangeTrend in MonthsJuneMayPercentage Point Change
Business Activity/Production51.756.5-4.8GrowingSlower4753.448.64.8
New Orders50.856-5.2GrowingSlower4751.948.83.1
Supplier Deliveries51.552-0.5SlowingSlower65048.71.3
Backlog of Orders5251.50.5GrowingFaster546.548-1.5
New Export Orders47.550-2.5ContractingFrom Unchanged154.5513.5
Imports53.549.54GrowingFrom Contracting15654.51.5
Inventory Sentiment61.562.5-1Too HighSlower193N/AN/AN/A
Customers' InventoriesN/AN/AN/AN/AN/AN/A4546-1

ISM Discussion

New orders plunged 5.2 percentage points to 50.8%, barely above contraction. The Business Activity Index registered 51.7 percent, 4.8 percentage points lower than the 56.5 percent reported in May. Yet, the employment index surged to 54.7% from 50.1%.

I expect this divergence to resolve to the downside.

Mike "Mish" Shedlock