February 2013 ISM Reports

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Manufacturing expanded modestly in February, with the Institute for Supply Management’s (ISM) PMI registering 54.2 percent, an increase of 1.1 percentage points from January's seasonally adjusted reading of 53.1 percent (50 percent is the breakpoint between contraction and expansion). “This month's reading reflects the highest PMI since June 2011, when the index registered 55.8 percent,” observed Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee. Respondent quotes were generally upbeat, including one Wood Products respondent who said, "Demand indicators are robust. Supply is constrained. Pricing is escalating."

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The pace of growth in the service sector also picked up slightly in February. The non-manufacturing index (now known simply as the “NMI”) registered 56.0 percent, 0.8 percentage point higher than January’s 55.2 percent. “This month's reading also reflects the highest NMI since February 2012, when the index registered 56.1 percent,” said Anthony Nieves, chair of ISM’s Non-manufacturing Business Survey Committee. “The majority of respondents' comments reflect a growing optimism about the trend of the economy and overall business conditions.” For example, one Real Estate, Rental & Leasing respondent observed that the "construction market [is] showing some positive signs." That was confirmed by a Construction respondent who said, "Business is picking up; more projects to bid and things are improving." 

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Wood Products reported a pickup in activity, although the increase was apparently limited to the pace of production. Paper Products expanded as well, thanks to new and backlogged orders, production and employment. Real Estate expanded, although the contributing changes were limited to new and backlogged orders. Construction exhibited growth across most sub-indices, while Ag & Forestry contracted despite expansion among backlogged and new export orders, and imports.

Prices increased for a variety of commodities, including diesel and gasoline; lumber (including pine, plywood and treated); corrugated boxes/packaging; paper; natural gas; oil and caustic soda. Copy paper was the only relevant commodity down in price. No relevant commodities were in short supply.

Along with the overall upbeat note in these reports, we see a couple of items that sound a cautionary note and bear watching: First, input prices are rising too quickly (both indices are above 60). Second, employment -- while still solidly positive in both indices -- is increasing at a decreasing pace.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

January 2013 ISM Reports

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Manufacturing expanded notably in January, with the Institute for Supply Management’s (ISM) PMI registering 53.1 percent, an increase of 2.9 percentage points from December's seasonally adjusted reading of 50.2 percent (50 percent is the breakpoint between contraction and expansion). “Manufacturing is starting out the year on a positive note,” observed Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, “with all five…component indexes -- new orders, production, employment, supplier deliveries and inventories -- registering above 50 percent in January.” Respondent quotes were less optimistic than might be expected from the PMI headline, however. For example, one Wood Products respondent said, "The general theme developing in our industry is that we can move suitable volumes. However, profit margin is elusive." 

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The service sector slipped slightly in January. The non-manufacturing index (now known simply as the “NMI”) registered 55.2 percent, 0.5 percentage point lower than December’s 55.7 percent. “Respondents' comments are mixed about the economy and business conditions,” said Anthony Nieves, chair of ISM’s Non-manufacturing Business Survey Committee; “however, the majority of respondents are optimistic about the overall direction.” Comments from a couple of relevant industries illustrate Nieves’ claim: "Business is good, but we find ourselves in a very competitive environment," said one Construction respondent. “No change in business levels since prior month,” wrote a Real Estate, Rental & Leasing respondent, “but optimism growing that commercial and industrial construction will experience growth in 2013.” 

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Wood Products reported slower activity, with a majority of respondents indicating fewer new or backlogged orders, higher input prices and lower production. Paper Products was unchanged overall. Real Estate expanded, but the contributing change was limited to larger order backlogs. Construction exhibited growth in new and export orders, and employment. Ag & Forestry mimicked Construction, but also reported new export orders.

Prices increased for a variety of commodities, including diesel and gasoline; pine, spruce and treated lumber; corrugated boxes/packaging; and caustic soda. Paper was the only relevant commodity down in price. No relevant commodities were in short supply.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

December 2012 ISM Reports

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Manufacturing expanded slightly in December, with the Institute for Supply Management’s (ISM) PMI registering 50.7 percent -- from 49.5 percent in November (50 percent is the breakpoint between contraction and expansion). “Comments from the [respondent] panel this month are mixed, with some indicating a strengthening of demand and others indicating a continuing softness in demand,” observed Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee. “Additionally, many respondents express uncertainty about government regulations, taxes and global economics in general as we approach 2013.”

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The service sector report was even more upbeat. The non-manufacturing index (now known simply as the “NMI”) registered 56.1 percent in December, 1.4 percentage point higher than November’s 54.7 percent -- indicating faster growth. “Respondents' comments remain mixed,” said Anthony Nieves, chair of ISM’s Non-manufacturing Business Survey Committee, “and are mostly positive about business conditions and the economy.”

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Wood Products reported expanded activity, although higher employment and backlogged orders were the only contributing categories. Paper Products’ expansion, on the other hand, was supported from a majority of sub-indices. Overall activity expanded in Real Estate, but the change was limited to inventories. Construction exhibited growth in new, backlogged and export orders; and employment and inventories. Ag & Forestry also grew, but only in new import and export orders.

Prices increased for a variety of commodities, including pine, spruce and treated lumber; corrugated boxes/packaging; and caustic soda. Gasoline, diesel fuel and natural gas were down in price. No relevant commodities were in short supply.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

November 2012 ISM Reports

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Manufacturing contracted slightly in November, with the Institute for Supply Management’s (ISM) PMI falling back to 49.5 percent -- from 51.7 percent in October (50 percent is the breakpoint between contraction and expansion). Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, was upbeat nonetheless. "The past relationship between the PMI and the overall economy indicates that the average PMI for January through November (51.8 percent) corresponds to a 3.1 percent increase in real GDP,” Holcomb said. “In addition, if the PMI for November (49.5 percent) is annualized, it corresponds to a 2.3 percent increase in real GDP annually." Despite Holcomb’s optimism, the sub-indices exhibited widespread weakness; most showed either slower expansion or faster contraction. Only production and deliveries expanded at a faster pace, while imports contracted at a slower pace.
 

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The service sector report was much more upbeat. The non-manufacturing index (now known simply as the “NMI”) registered 54.7 percent in November, 0.5 percentage point higher than October’s 54.2 percent -- indicating faster growth. “Respondents' comments are mixed;” said Anthony Nieves, chair of ISM’s Non-manufacturing Business Survey Committee, adding, “however, the majority of survey respondents reflect a cautious optimism about current economic conditions.”
 

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Wood Products reported contracting activity once again; increased production contributed essentially all of the meager upbeat news for that industry. Paper Products’ expansion, on the other hand, was supported from nearly all sub-indices. Overall activity expanded in Real Estate, but changes were limited to new and backlogged orders. Construction and Ag & Forestry exhibited growth in employment and new orders.

Prices increased for a variety of commodities, including corrugated boxes/packaging, lumber and caustic soda. Some respondents reported gasoline and diesel as higher in price, and some as down in price. No relevant commodities were in short supply.


The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

October 2012 ISM Reports

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Manufacturing expanded at a slightly faster rate in October, with the Institute for Supply Management’s (ISM) PMI edging up to 51.7 percent -- from 51.5 percent in September (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, concluded with, "Comments from the [respondent] panel this month reflect continued concern over a fragile global economy and soft orders across several manufacturing sectors." The sub-indices were mixed: The number of respondents reporting increased new orders was partially to completely offset by the combination of decreased import and export orders, and shrinking order backlogs. Although production expanded, growth in the employment index slowed.
 

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The service sector grew at a slower clip in October, reflected by a 0.9 percentage point drop (to 54.2 percent) in the non-manufacturing index (now known simply as the “NMI”). Comments by Anthony Nieves, chair of ISM’s Non-manufacturing Business Survey Committee, had much the same tenor as Holcomb’s. “The majority of the respondents' comments reflect a positive but guarded outlook on business conditions and the economy,” said Nieves. Not only did fewer respondents report growth in new orders, but order backlogs and import/export orders also contracted. The most encouraging aspects of the non-manufacturing report involved expanding employment and lessened input-price pressure.
 

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Wood Products reported contracting activity; new export orders contributed nearly all of the meager upbeat news for that industry. Paper Products’ expansion was limited to new orders, production and employment. Real Estate reported contraction in overall activity, thanks entirely to slower supplier deliveries. Construction, by contrast, expanded under the influence of employment, and new domestic and export orders. Ag & Forestry also exhibited growth in employment and new orders.

Prices increased for a variety of commodities, including corrugated products, linerboard, pallets, paper and caustic soda. Lumber was down in price. Some respondents reported gasoline and diesel as higher in price, and some as down in price. No relevant commodities were in short supply.


The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

September 2012 ISM Reports

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Manufacturing moved back into expansion territory during September, with the Institute for Supply Management’s (ISM) PMI jumping up to 51.5 percent, from 49.6 in August (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, concluded with, “Comments from the [respondent] panel generally reflect a mix of optimism over new orders beginning to pick up, and continued concern over soft global business conditions and an unsettled political environment." The sub-indices were mixed: The number of respondents reporting increased new orders and employment rose, and new export orders contracted more slowly in the face of a dramatic rise in the number of respondents reporting higher input prices.
 

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The service sector grew at a faster clip in September, reflected by a 1.4 percentage point rise (to 55.1 percent) in the non-manufacturing index (now known simply as the “NMI”). Comments by Anthony Nieves, chair of ISM’s Non-manufacturing Business Survey Committee, had the same tenor as Holcomb’s. “Respondents' comments continue to be mixed,” said Nieves; “however, the majority indicate a slightly more positive perspective on current business conditions." The mix of service sub-indices was somewhat more upbeat than was the case for manufacturing; the number of respondents reporting heightened business activity and new orders increased dramatically; however, the number of firms facing higher input prices once again rose noticeably.
 

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Wood Products reported greater overall activity in September, but the only subindex contributing to it appeared to be greater employment. Paper Products’ expansion was more broadly based, but some clouds may be on the horizon from falling new export orders and higher imports. Real Estate reported contraction in overall activity, thanks primarily to a drop in employment. Construction, by contrast, received broad-based encouraging news.

Prices for fuel and corrugated boxes increased in September; some respondents reported higher prices for copier paper, while other lower prices. No relevant commodities were in short supply.

August 2012 ISM Reports

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Manufacturing’s contraction picked up the slightest bit of speed in August, with the Institute for Supply Management’s (ISM) PMI ticking down to 49.6 percent, from 49.8 in July (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, concluded with, “Comments from the [respondent] panel generally reflect a slowdown in orders and demand, with continuing concern over the uncertain state of global economies." The mix among the sub-indices was disheartening, as new orders, new export orders and order backlogs shrank in the face of rising producer inventories and input prices.
 

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The service sector grew at a faster clip in August, reflected by a 1.1 percentage point rise (to 53.7 percent) in the non-manufacturing index (now known simply as the “NMI”). Comments by Anthony Nieves, chair of ISM’s Non-manufacturing Business Survey Committee, were almost identical to Holcomb’s. “Respondents' comments continue to be mixed,” said Nieves, “and for the most part reflect uncertainty about business conditions and the economy." The mix of service sub-indices was somewhat more upbeat; at least new orders, order backlogs and new export orders increased (even if, as in some cases, only barely); however, the number of firms facing higher input prices rose dramatically.
 

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Wood Products remained unchanged in August, with the good news of shrinking customer inventories offset by rising imports. Paper Products expanded, but some clouds may be on the horizon from falling new orders, new export orders and order backlogs; some of that bad news may be mitigated by declining imports. Real Estate and Ag & Forestry both reported expansion in overall activity, thanks primarily to new orders. Construction, by contrast, is facing an uphill battle from falling new orders and shrinking order backlogs.

Prices for corrugated cartons, diesel, gasoline, lumber (pine, spruce and treated) and caustic soda increased in August. No relevant commodities either fell in price or were in short supply.

July 2012 ISM Reports

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Manufacturing contracted marginally agin in July, with the Institute for Supply Management’s (ISM) PMI ticking up to 49.8 percent, from 49.7 in June (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, concluded with, “A growing number of comments from the [respondent] panel this month reflect a slowdown in their businesses and general concern over increasing economic uncertainty."
 

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The non-manufacturing sector grew at a slightly faster pace in July, reflected by a 0.5 percentage point rise (to 52.6 percent) in the non-manufacturing index (now known simply as the “NMI”). In light of the Bureau of Labor Statistics’ report that employment expanded in July, perhaps the most noteworthy aspect of the ISM reports is that employment either grew more slowly (manufacturing sector) or contracted outright (service sector).
 

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Wood and Paper Products both contracted in July; about the only good news is that customers’ inventories shrank, which could result in additional new orders in the future. "We have noticed a marked slowing in business overall,” said one Wood Products respondent, having “confirmed this with other companies in our industry as well." Construction and Ag & Forestry also reported contraction in overall activity, while Real Estate expanded thanks to new orders.

Prices for copier paper increased in July, while fuel prices rose in some areas and fell in others. No relevant commodities were in short supply.

June 2012 ISM Reports

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Manufacturing contracted slightly in June, with the Institute for Supply Management’s (ISM) PMI dropping to 49.7 percent, from 53.5 in May (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, concluded with, “Comments from the [respondent] panel range from continued optimism to concern that demand may be softening due to uncertainties in the economies in Europe and China."
 

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The non-manufacturing sector grew at a noticeably slower pace in June, reflected by a 1.6 percentage point drop (to 52.1 percent) in the non-manufacturing index (now known simply as the “NMI”). "The Employment Index increased by 1.5 percentage points to 52.3 percent, indicating continued growth in employment at a faster rate," observed Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee, in regard to perhaps the only solidly positive aspect of the report.
 

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Although the subindices netted out to no change for Wood Products, we note the decrease in customer inventoreies as a potentially positive sign. Paper Products contracted as the drop in production and export orders overwhelmed the positive effect of rising new orders. Real Estate and Ag & Forestry both reported contraction in overall activity, while Construction expanded. Nonetheless, "[the g]eneral state of business this month is flat, with no changes." claimed one Construction respondent.

Prices for paper increased in June, while diesel fuel fell. No relevant commodities were in short supply.

May 2012 ISM Reports

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The pace of growth in manufacturing slowed slightly in May, with the Institute for Supply Management’s (ISM) PMI dropping to 53.5 percent, from 54.8 in March (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, concluded with, “Comments from the panel generally reflect stable-to-strong orders, with sales showing steady improvement over the first five months of 2012."
 

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The non-manufacturing sector grew at a slightly faster pace in May, reflected by a 0.2 percentage point rise (to 53.7 percent) in the non-manufacturing index (now known simply as the “NMI”). "The majority of the respondents' comments are positive and optimistic about business conditions and the direction of the economy," concluded Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee.
 

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Although the subindices netted out to no change for Wood Products, we note the increase in new orders (including exports) and decreasing imports as positive signs. Paper Products expanded as new orders (including exports), production and employment all rose. Real Estate and Construction both reported expansion in overall activity, while Ag & Forestry was unchanged. "Q2 will be a strong quarter for us; the building market is starting to wake up," claimed one Construction respondent.

Prices for corrugated, lumber and paper products all increased in May. Caustic soda was the only relevant commodity down in price. No relevant commodities were in short supply.

April 2012 ISM Reports

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The pace of growth in manufacturing sped up slightly in April, with the Institute for Supply Management’s (ISM) PMI rising to 54.8 percent, from 53.4 in February (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, wrapped up his comments by saying, “Sixteen of the 18 industries reflected overall growth in April, and the New Orders, Production and Employment Indexes all increased, indicating growth at faster rates than in March.... Comments from the panel generally indicate stable to strong demand, with some concerns cited over increasing oil prices and European stability."
 

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The non-manufacturing sector grew at a slower pace in April, reflected by a 2.5 percentage point drop (to 53.5 percent) in the non-manufacturing index (now known simply as the “NMI”). "Respondents' comments affirm the slowing rate of growth," concluded Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee. “In addition, they remain concerned about rising fuel costs and the impact on shipping, transportation and petroleum-based product costs.” As shown by the graph above, input prices rose at the same pace for the manufacturing sector but more slowly for the service sector.
 

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A drop in order backlogs was the only change in Wood Products, which shrank in April; other than perhaps higher input prices and expanded imports, the positive news for Paper Products was widespread. Real Estate and Construction both reported expansion in overall activity, while Ag & Forestry contracted.

Prices for gasoline, diesel fuel, lumber and paper products all increased in April. No relevant commodities were either down in price or in short supply.

March 2012 ISM Reports

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The pace of growth in manufacturing sped up slightly in March, with the Institute for Supply Management’s (ISM) PMI rising to 53.4 percent, from 52.4 in February (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, wrapped up his comments by saying, “Of the 18 industries included in the survey, 15 are experiencing overall growth. Comments from the panel remain positive, with several respondents citing increased sales and demand for the next few months."
 

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The non-manufacturing sector grew at a slower pace in March, reflected by a 1.3 percentage point drop (to 56.0 percent) in the non-manufacturing index (now known simply as the “NMI”). "Respondents' comments remain mostly optimistic about business conditions. They indicate that increased discretionary spending reflects the increased confidence level of businesses and consumers," concluded Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee. However, “there is continued concern about cost pressures and the instability of fuel prices.” As shown by the graph above, input prices rose more slowly for both the manufacturing and service sectors.
 

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More new orders and added employment helped Wood Products expand in March; the positive news for Paper Products was even broader. Real Estate and Construction both reported expansion in overall activity, while Ag & Forestry contracted.

Lumber, crude oil, diesel fuel and gasoline were up in price. Natural gas was the only relevant commodity down in price. No relevant commodities were in short supply.

February 2012 ISM Reports

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The pace of growth in manufacturing slowed slightly in February, with the Institute for Supply Management’s (ISM) PMI falling to 52.4 percent, from 54.1 in January (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, wrapped up his comments by saying, “Comments from the [respondent] panel continue to reflect a generally positive outlook for the next few months."
 

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The non-manufacturing sector extended gains in February, reflected by a 0.5 percentage point rise (to 56.8 percent) in the non-manufacturing index (now known simply as the “NMI”). "The majority of comments from the respondents reflect a growing level of optimism about business conditions and the overall economy," concluded Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee. However, “there is a concern about inflation, rising fuel prices and petroleum-based product costs.” As shown by the graph above, the diffusion indices for input prices jumped noticeably among both the manufacturing and service sectors.
 

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Wood Products was unchanged in February, while Paper Products expanded once again; Paper Products bucked the trend of higher input prices. Real Estate and Construction both reported expansion in overall activity, while Ag & Forestry was unchanged.

Caustic soda, lumber, diesel fuel and gasoline were up in price. Paper and paper tissues were the only relevant commodities down in price. No relevant commodities were in short supply.

January 2012 ISM Reports

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The pace of growth in manufacturing extended gains in January, with the Institute for Supply Management’s (ISM) PMI rising to 54.1 percent, from 53.9 in December (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, wrapped up his comments by saying, “Manufacturing is starting out the year on a positive note, with new orders, production and employment all growing in January."
 

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The non-manufacturing sector jumped higher in January, reflected by a 3.8 percentage point rise (to 56.8 percent) in the non-manufacturing index (now known simply as the “NMI”). "Respondents' comments are mostly positive about business conditions. There is concern about cost pressures and the sustainability of the recent spike in activity,” concluded Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee.
 

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The only reported change in Wood Products reflected a slowdown in production. Despite the lack of encouraging news, at least some Wood Products participants are seeing light at the end of the tunnel. "Market conditions appear to be improving, with the outlook for 2012 better yet," said one Wood Products respondent. Paper Products expanded, the only “negative” being rising input prices. "Once again, business continues to be strong," said one Paper Products contributor. Real Estate and Construction both reported expansion in overall activity, while Ag & Forestry was unchanged.

As the bar chart and table above indicate, input prices moved higher in January: that was a reversal of fortunes for manufacturing, but a continuation of the trend in the service sector.

Paper, diesel fuel and gasoline were up in price. The only relevant commodity down in price was corrugated cartons. No. 2 diesel fuel was listed in short supply.

December 2011 ISM Reports

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The pace of growth in manufacturing picked up again in December, with the Institute for Supply Management’s (ISM) PMI rising to 53.9 percent, from 52.7 in November (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, wrapped up his comments by saying, “Manufacturing is finishing out the year on a positive note, with new orders, production and employment all growing in December at faster rates than in November, and with an optimistic view toward the beginning of 2012 as reflected by the panel in this month's survey."
 

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The non-manufacturing sector also edged up in December, reflected by a 0.6 percentage point rise (to 52.6 percent) in the non-manufacturing index (now known simply as the “NMI”). "Respondents' comments are mixed and vary by industry and company. Economic growth continues to be slowed by the lag in employment,” concluded Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee.
 

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The only reported change in Wood Products reflected a slowdown in new orders. Paper Products expanded, the main foreward-looking “negatives” being declines in new export orders and a rise in inventories. Real Estate and Ag & Forestry both reported contraction in overall activity, while Construction expanded.

As the bar chart and table above indicate, input price behavior was mixed during December: prices fell more slowly for manufacturing but rose more slowly for the service sector.

Some respondents reported paying more for fuel while others paid less. The only relevant commodity described as being in short supply was #2 diesel fuel.

November 2011 ISM Reports

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The pace of growth in manufacturing picked up slightly in November, with the Institute for Supply Management’s (ISM) PMI rising to 52.7 percent, from 50.8 in October (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, wrapped up his comments by saying, “Respondents cite continuing concerns about the general economic environment, government regulations and European financial conditions, but are cautiously more optimistic about the next few months based on lower raw materials pricing and favorable levels of new orders."
 

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The non-manufacturing sector grew at a marginally slower pace in November, reflected by a 0.9 percentage point drop (to 52.0 percent) in the non-manufacturing index (now known simply as the “NMI”). This is the lowest reading since January 2010, when the index registered 50.7 percent. "Respondents' comments for the most part project continued slow, incremental growth. There still remains a strong concern about lagging employment,” concluded Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee.
 

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Expanding new orders and employment, and higher production helped lift overall activity for Wood Products in November. Paper Products also expanded, the main foreward-looking “negatives” being declines in orders and a rise in inventories.

Construction and Ag & Forestry both reported contraction in overall activity, while Real Estate expanded.

As the bar chart and table above indicate, input price behavior was mixed during November: prices fell more slowly for manufacturing but rose more quickly for the service sector.

Paper and paper products were the only relevant commodities up in price during November; cardboard products were down in price. Some respondents reported paying more for fuel while others paid less. No relevant commodity was described as being in short supply.

October 2011 ISM Reports

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The pace of growth in manufacturing nearly stalled again in October, with the Institute for Supply Management’s (ISM) PMI falling to 50.8 percent, from 51.6 in September (50 percent is the breakpoint between contraction and expansion). After reciting some report details, Bradley Holcomb, chair of ISM’s Manufacturing Business Survey Committee, wrapped up his comments by saying, “Comments from respondents are mixed, indicating positive relief from raw materials pricing and continuing strength in a few industries, but there is also more concern and caution about growth in this uncertain economy."
 

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The non-manufacturing sector also grew at a marginally slower pace in September, reflected by a 0.1 percentage point drop (to 52.9 percent) in the non-manufacturing index (now known simply as the “NMI”). "Even though there is month-over-month growth in the Employment Index, respondents are still expressing concern over available labor resources and job growth,” concluded Anthony Nieves, chair of ISM’s Non-Manufacturing Business Survey Committee. “The continued strong push for inventory reduction by supply management professionals has resulted in contraction in the Inventories Index for the first time in eight months. Respondents' comments are mixed and reflect concern about future business conditions.”
 

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Wood Products was unchanged, with higher production being offset by fewer new orders. Paper Products expanded, but declines in new, backlogged and export orders suggest more difficulty in the future.

Real Estate and Construction both reported contraction in overall activity during October, while Ag & Forestry remained unchanged.

As the bar chart and table above indicate, input price behavior was mixed during October: prices fell for manufacturing but rose more slowly for the service sector.

Paper and plywood were the only relevant commodities up in price during October; diesel fuel and gasoline were down in price. No relevant commodity was described as being in short supply.