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Economic Update: ISM Non-Manufacturing (Services Sector) Index

The ISM (Institute of Supply Management) Non-Manufacturing index confirmed that the services sector of the U.S. economy, the largest and most important sector of the economy, remained in expansion mode during March.

It was also encouraging that the ISM Non-Manufacturing index (a measure of the services sector) came in better than expectations and above last month’s reading.

The headline index was reported at 54.5 in March, which was above the consensus estimate for a reading of 54.1 and above the February reading of 53.4.

The primary components of the Report showed improvement from last month:

  • Employment: 56.7 vs. last month: 55.5
  • New Orders: 58.2 vs. last month: 57.5
  • Business Activity: 59.8 vs. last month: 57.8
  • Prices: 49.1 vs. last month 45.5

The takeaway from this reports is the economy appears to be experiencing a rebound after the recent slump.

The ISM Non-Manufacturing index is designed to indicate the state of the services sector in the economy. Readings above 50 are indicative of expansion while below 50 suggests contraction in the sector.

The analysis provided is based on both technical and fundamental research and is provided “as is” without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.


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About the Author

David Moenning is the Chief Investment Officer at Sowell Management Services. Dave began his investment career in 1980 and has been an independent money manager since 1987. Thus, Dave has been live on the firing line and investing for a living for more than 29 years.