The June 2013 Non-Manufacturing ISM Report On Business® shows a slowing in NMI™ to 52.2%, well below the Bloomberg NMI consensus figure of 54.5%.
ISM at a Glance
| Non-Manufacturing | Manufacturing | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Index | June | May | Percentage Point Change | Direction | Rate of Change | Trend in Months | June | May | Percentage Point Change |
| NMI™/PMI™ | 52.2 | 53.7 | -1.5 | Growing | Slower | 42 | 50.9 | 49 | 1.9 |
| Business Activity/Production | 51.7 | 56.5 | -4.8 | Growing | Slower | 47 | 53.4 | 48.6 | 4.8 |
| New Orders | 50.8 | 56 | -5.2 | Growing | Slower | 47 | 51.9 | 48.8 | 3.1 |
| Employment | 54.7 | 50.1 | 4.6 | Growing | Faster | 11 | 48.7 | 50.1 | -1.4 |
| Supplier Deliveries | 51.5 | 52 | -0.5 | Slowing | Slower | 6 | 50 | 48.7 | 1.3 |
| Inventories | 54.5 | 51.5 | 3 | Growing | Faster | 5 | 50.5 | 49 | 1.5 |
| Prices | 52.5 | 51.1 | 1.4 | Increasing | Faster | 45 | 52.5 | 49.5 | 3 |
| Backlog of Orders | 52 | 51.5 | 0.5 | Growing | Faster | 5 | 46.5 | 48 | -1.5 |
| New Export Orders | 47.5 | 50 | -2.5 | Contracting | From Unchanged | 1 | 54.5 | 51 | 3.5 |
| Imports | 53.5 | 49.5 | 4 | Growing | From Contracting | 1 | 56 | 54.5 | 1.5 |
| Inventory Sentiment | 61.5 | 62.5 | -1 | Too High | Slower | 193 | N/A | N/A | N/A |
| Customers’ Inventories | N/A | N/A | N/A | N/A | N/A | N/A | 45 | 46 | -1 |
ISM Discussion
New orders plunged 5.2 percentage points to 50.8%, barely above contraction. The Business Activity Index registered 51.7 percent, 4.8 percentage points lower than the 56.5 percent reported in May. Yet, the employment index surged to 54.7% from 50.1%.
I expect this divergence to resolve to the downside.
Mike “Mish” Shedlock
