The Economy

Like Manufacturing Growth, Non-Manufacturing Slows

Feb. 3, 2006

Business activity in the non-manufacturing sector of the U.S. economy -- a group that includes mining, construction, finance, transportation and communications -- increased for the thirty-fourth consecutive month in January. But like the economy's manufacturing sector, it grew more slowly than in December 2005, according to data released Feb. 3 by the Institute for Supply Management (ISM), Tempe, Ariz.

ISM's business activity index for non-manufacturing was at 56.8% in January, 4.2 percentage points lower than December 2005's 61%. A figure above 50% indicates the non-manufacturing sector generally is expanding; a figure below 50% signals that it is contracting.

Both new orders and employment among non-manufacturers increased in January, although at a slower rate than in December of last year. The new orders index was 56% in January, down 6.2 percentage points from December's 62.2%. The employment index was 51.1% in January, down 5.8 percentage points from 56.9% in December.

"The overall indication in January is continued economic growth in the non-manufacturing sector, but at slower rates of increase," says Ralph G. Kauffman, chair of ISM's non-manufacturing business survey committee and coordinator of the Supply Chain Management Program at the University of Houston-Downtown.

As ISM was releasing data for non-manufacturing, the U.S. Commerce Department was reporting that factory orders in December were a seasonally adjusted $415.1 billion, a 1.1% increase from November's mark of $410.6 billion and the highest since 1992. The biggest percentage increase came in machinery, up 6.5%.

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.