May ISM Non-Manufacturing Index Strongest Since August 2000

ByJohn S. McClenahen Paralleling last month's activity in the nation's factories, the non-manufacturing sector of the U.S. economy posted its fourth consecutive monthly advance in May. The Tempe, Ariz.-based Institute for Supply Management's (ISM) non-manufacturing index was 60.1% last month, its strongest showing since August 2000 and 4.8 percentage points above April's mark of 55.3%. "New orders grew at a slightly higher rate than in April. Order backlogs increased for the first time in 17 months, export and import activity increased, and inventories decreased," notes Ralph G. Kauffman, chairperson of ISM's non-manufacturing business survey committee and coordinator of the purchasing and supply management program at the University of Houston-Downtown. "Employment continued to decrease -- but more slowly than in April -- and prices increased at a slower rate than in April," adds Kauffman. The index is based on data compiled from more than 370 purchasing and supply executives in 62 industries.