Stat of the Day: ISM Services Soars Above Expectations
The March ISM NMI or Services index came in at a strong 55.4 easily beating expectations and the 53 reported for February. Some of the numbers that stick out were the business activity and orders both jumping to 60+ while at the same time employment and inventories both remained in contraction mode. In fact, even though more companies are increasing inventories, we've still got companies decreasing as well. Prices paid are getting hot at 62, but with employment still contracting at a lot of businesses inflation will be contained.
Index continues its steady growth out of the Great Recession. Its been a lot more methodical then some hoped, but over the last 2 months its finally hit the tipping point. At this point, I'd expect the remaining companies holding out on adding to inventories to finally relent as the recovery takes hold.
10% more companies have cut inventory since December. Really?
- "The NMI (Non-Manufacturing Index) registered 55.4 percent in March, 2.4 percentage points higher than the seasonally adjusted 53 percent registered in February, and indicating growth in the non-manufacturing sector. The Non-Manufacturing Business Activity Index increased 5.2 percentage points to 60 percent, reflecting growth for the fourth consecutive month. The New Orders Index increased 7.3 percentage points to 62.3 percent, and the Employment Index increased 1.2 percentage points to 49.8 percent. The Prices Index increased 2.5 percentage points to 62.9 percent in March, indicating an increase in prices paid from February. According to the NMI, 14 non-manufacturing industries reported growth in March. Respondents' comments are mostly positive about business conditions and the direction of the economy."
Index continues its steady growth out of the Great Recession. Its been a lot more methodical then some hoped, but over the last 2 months its finally hit the tipping point. At this point, I'd expect the remaining companies holding out on adding to inventories to finally relent as the recovery takes hold.
| Month | NMI | Month | NMI | |
|---|---|---|---|---|
| Mar 2010 | 55.4 | Sep 2009 | 50.1 | |
| Feb 2010 | 53.0 | Aug 2009 | 48.2 | |
| Jan 2010 | 50.5 | Jul 2009 | 46.7 | |
| Dec 2009 | 49.8 | Jun 2009 | 46.3 | |
| Nov 2009 | 48.4 | May 2009 | 44.5 | |
| Oct 2009 | 50.1 | Apr 2009 | 43.9 | |
| Average for 12 months — 48.9 High — 55.4 Low — 43.9 | ||||
10% more companies have cut inventory since December. Really?
Inventories | % Higher | % Same | % Lower | Index |
|---|---|---|---|---|
| Mar 2010 | 21 | 51 | 28 | 46.5 |
| Feb 2010 | 14 | 62 | 24 | 45.0 |
| Jan 2010 | 16 | 61 | 23 | 46.5 |
| Dec 2009 | 21 | 61 | 18 | 51.5 |
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