September 6, 2017 – The ISM Non-Manufacturing Index helps determine overall conditions in the services sector. Components evaluated are employment, business activity, new orders, and supplier deliveries. The nonmanufacturing sector represents a much larger share of the overall U.S. economy when compared to the manufacturing sector, making up approximately 80%. Readings above 50 indicate an expansion while readings below 50 signal decline.
The ISM Non-Manufacturing Index came in 55.3, below the consensus of 55.8 but above the previous month of 53.9. New orders came in at 57.1 while the employment index also increased in August to 56.2. Business activity increased to 57.5 from 55.9.
August’s non-manufacturing index reading over 50 means the non-manufacturing sector grew for 92 months in a row. 15 of the 18 industries in the non-manufacturing sector reported growth in August. Retail trade, information, management of companies & support services leading the group in growth, while agriculture & hunting, and transportation lagged. Higher non-manufacturing growth is beneficial for stimulating the economy with extra money but also causes slower deliveries of these services due to higher demand.