ISM non-manufacturing index

http://mam.econoday.com/byshoweventfull.asp?fid=456259&cust=mam&year=2013&lid=0

ISM Non-Mfg Index

Released On 4/3/2013 10:00:00 AM For Mar, 2013 Prior Consensus Consensus Range Actual Composite Index - Level 56.0  56.0  54.0  to 56.5  54.4

Highlights Employment is the weak link in March's non-manufacturing from the ISM whose headline composite index fell 1.6 points to a 54.4 level that indicates the slowest rate of monthly growth since July last year. The employment index is down a sizable 3.9 points to 53.3, still indicating monthly growth but -- in a parallel to this morning's ADP report -- monthly growth at a slowing rate. New orders are also slowing, down 3.6 points to 54.6. But backlog orders, unchanged at 54.5, continue to build in what is an especially good reading for this index. Business activity remains steady and strong and deliveries are slowing which is another sign of strength. This report, much like Monday's ISM report on manufacturing, has plenty of strength in some of the details. Growth remains solid and perhaps slowing now then is welcome, to keep activity within the rate of available capacity. Another positive in the report is an easing in price pressures, the result of lower fuel prices. The Dow, reacting to the headline and no doubt the employment reading, is moving to opening lows.

Market Consensus before announcement The composite index from the ISM non-manufacturing survey rose nearly one point in February to a higher-than-expected level of 56.0 which indicated a stronger pace of overall growth relative to what was already a strong rate in January. This index covers the bulk of the economy-services, construction, mining, and agriculture. Forward momentum is moderately good as the new orders index was up a very sharp 3.8 points to 58.2 with backlogs posting a 5.5 point jump to a very strong 55.0.

Definition The non-manufacturing ISM surveys more than 375 firms from numerous sectors across the United States, including agriculture, mining, construction, transportation, communications, wholesale trade and retail trade. The non-manufacturing composite index has four equally weighted components: business activity (closely related to a production index), new orders, employment, and supplier deliveries (also known as vendor performance). The first three components are seasonally adjusted but the supplier deliveries index does not have statistically significant seasonality and is not adjusted. For the composite index, a reading above 50 percent indicates that the non-manufacturing economy is generally expanding; below 50 percent indicates that it is generally declining. The supplier deliveries component index requires extra explanation. A reading above 50 percent indicates slower deliveries and below 50 percent indicates faster deliveries. However, slower deliveries are a plus for the economy—indicating demand is up and vendors are not able to fill orders as quickly.  Why Investors Care

The ISM non-manufacturing survey does not compile a composite index like its manufacturing cousin. The business activity index, which is actually akin to the production index in the manufacturing survey, is widely followed as the key figure from this survey. Data Source: Haver Analytics