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ISM Non-Mfg Index  
Released On 11/5/2018 10:00:00 AM For Oct, 2018
PriorConsensusConsensus RangeActual
Composite Index - Level61.6 59.1 56.0  to 61.2 60.3 

October's ISM non-manufacturing index was expected to slow from September's record and it did, but at 60.3 the slowing is a bit less than Econoday's 59.1 consensus. New orders, like they are in the services PMI released earlier this morning, are the highlight of October's report, holding at an enormously strong 61.6 with export orders also holding unchanged, at 61.0.

Capacity strains on the sample are not deepening as the build in backlog orders slowed by 5.0 points to a manageable 53.5. The sample is successfully building inventories despite a noticeable but not severe lengthening in delivery times. Hiring is very strong but, at 59.7, is 2.7 points below September's outsized 62.4. Input prices are elevated but at 61.7 are down 2.5 points.

The strength in export orders highlights how strong foreign demand is for U.S. services, such as financial services and technical and managerial services. Yet concerns over tariffs particularly with China are a constant refrain of the sample's commentary amid concerns that related costs may soon begin to escalate.

Tariffs aside, ISM's non-manufacturing sample has been having an extraordinarily good year and, based on the strength of new orders in October's report, looks to end 2018 at a robust pace. These results in combination with this morning's service PMI hint at a very fast fourth-quarter start for the bulk of the U.S. economy.

Consensus Outlook
Modest slowing at a still highly elevated rate of growth is the call for ISM's non-manufacturing index for October, at a consensus 59.1 vs a record 61.6 in September that, for a second straight month, came in well above expectations. Record readings for employment and business activity led September's report that also included shortages and cost pressures.

The Institute For Supply Management surveys more than 375 firms from numerous sectors across the United States for its non-manufacturing index. This index covers services, construction, mining, agriculture, forestry, and fishing and hunting. The non-manufacturing composite index has four equally weighted components: business activity (closely related to a production index), new orders, employment, and supplier deliveries (also known as vendor performance). The first three components are seasonally adjusted but the supplier deliveries index does not have statistically significant seasonality and is not adjusted. For the composite index, a reading above 50 percent indicates that the non-manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. The supplier deliveries component index requires extra explanation. A reading above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries. However, slower deliveries are a plus for the economy -- indicating demand is up and vendors are not able to fill orders as quickly.  Why Investors Care
The ISM non-manufacturing index is an equally weighted composite of four separate components: business activity, new orders, employment, and supplier deliveries. The report tracks 17 industries, 15 of which are from the services sector as well as mining and construction.
Data Source: Haver Analytics

2018 Release Schedule
Released On: 1/52/53/54/45/36/57/58/39/610/311/512/5
Release For: DecJanFebMarAprMayJunJulAugSepOctNov

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