Complementing last week's report last that U.S. manufacturing activity had increased in June, data released July 6 by the Tempe, Ariz.-based Institute for Supply Management (ISM) show business activity among U.S. non-manufacturers also picked up in June. The ISM's business activity index for non-manufacturers was 62.2% last month, a gain of 3.7 percentage points from May's 58.5%.
A figure above 50% indicates that the non-manufacturing sector of the U.S. economy is growing; a figure below 50% signals it is contracting.
June's increase in non-manufacturing activity follows two consecutive months of decline in the rate of growth. However, the details in the June data reveal a mixed business picture. For example, while both new orders and the backlog of orders among non-manufacturers continued to grow in June, they did so at a slower rate than in May. And both employment among non-manufacturers and prices paid by non-manufacturers increased faster in June than during May.
The gain in U.S. manufacturing activity in June, reported by ISM on July 1, was 2.4 percentage points to an index figure of 53.8%. It followed six consecutive months during which growth in the manufacturing sector had slowed. Notably, new orders among manufacturers grew 5.5% between May and June, a contrast to the two-tenths percent decline in the growth rate of new orders among non-manufacturers during the same period.
ISM's non-manufacturing index is based on data from about 370 purchasing and supply executives in companies that include firms in finance and banking, mining and utilities. ISM's manufacturing index is based on data from purchasing and supply executives in more than 400 industrial companies.
