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U.S. Services Sector Expands for 34th Consecutive Month

November 06, 2012, 06:14 AM
Filed Under: Economy

Economic activity in the non-manufacturing sector grew in October for the 34th consecutive month, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business.

The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. "The NMI™ registered 54.2 percent in October, 0.9 percentage point lower than the 55.1 percent registered in September. This indicates continued growth this month at a slightly slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 55.4 percent, which is 4.5 percentage points lower than the 59.9 percent reported in September, reflecting growth for the 39th consecutive month. The New Orders Index decreased by 2.9 percentage points to 54.8 percent. The Employment Index increased by 3.8 percentage points to 54.9 percent, indicating growth in employment for the third consecutive month. The Prices Index decreased 2.5 percentage points to 65.6 percent, indicating prices increased at a slower rate in October when compared to September. According to the NMI™, 13 non-manufacturing industries reported growth in October. The majority of the respondents' comments reflect a positive but guarded outlook on business conditions and the economy."

Industry Performance

The 13 non-manufacturing industries reporting growth in October — listed in order — are:

  • Agriculture, Forestry, Fishing & Hunting
  • Construction
  • Other Services
  • Management of Companies & Support Services
  • Finance & Insurance
  • Professional, Scientific & Technical Services
  • Accommodation & Food Services
  • Transportation & Warehousing
  • Real Estate, Rental & Leasing
  • Health Care & Social Assistance
  • Information
  • Educational Services
  • Retail Trade

The five industries reporting contraction in October are:

  • Mining
  • Arts, Entertainment & Recreation
  • Wholesale Trade
  • Utilities
  • Public Administration

What respondents are saying…

"Business with markets and customers we serve remains strong." (Management of Companies & Support Services)

"Business is steady, with good fourth quarter expected." (Information)

"The sluggish pace of economic recovery coupled with rapid increases in gas prices on the West Coast continue to drag down customer traffic and discretionary spending. Levels remain well below last year." (Arts, Entertainment & Recreation)

"Ongoing concerns about healthcare reform; reluctance to expand or hire." (Health Care & Social Assistance)

"Outlook is positive yet still guarded. Clients have some pent-up demand that they are acting on with short-term contracts." (Professional, Scientific & Technical Services)

"More companies seeking relief from fuel increases." (Public Administration)

Read the full October Non-Manufacturing ISM Report On Business.

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