The Institute for Supply Management released the March 2008 Non-Manufacturing report today.
In March 2008, the NMI (Non-Manufacturing Index) increased 0.3% to 49.6. Per ISM, 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.” NMI has been less than 50 for 3 months in a row now.
Charles Schwab’s Guide to Economic Indicators has this tidbit:
According to the Bureau of Economic Analysis, the following represent the
approximate value added by category to gross domestic product based on 2006
year-end data:
· 76% non-manufacturing
· 12% manufacturing
· 12% government
New Export Orders were very strong rising 8.5% to 55%. Imports rose 5.5% to 54.5%. Business Activity rose 1.4% to 52.2%. The Prices Index rose 2.9% to 70.8% showing that there are still strong inflationary pressures.
Here is what the respondents had to say:
"Business has increased due in part to us reducing unit prices on all products. Sales traffic has increased and foreign buyers have made up the majority of the increased traffic." (Construction)- "Continued stress in the financial markets across a broad base of factors continues to have impacts on overall business activity." (Finance & Insurance)
- "Outrageous, speculative oil prices are driving up petroleum-based products as well as delivery costs." (Professional, Scientific & Technical Services)
- "Although business levels are higher this month, the current trend is not as active for spending." (Accommodation & Food Services)
- "Activity levels ahead of plan, but reimbursement and overall revenues only tracking to plan. Continued concerns regarding erosion of returns on investment which are used to fund capital projects, pension plans, etc." (Health Care & Social Assistance)
The NMI index mirrors the general mood in the stock market. It seems that the market is pricing in the hope that the worst is over.
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