ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index decreased by 0.6 points month on month (-1.1% m/m) to 55.3 in June 2022.

The ISM non-manufacturing survey measures the rate and direction of change in activity in non-manufacturing industries. Surveys are sent to more than 400 purchasing managers in 18 industries. Survey responses reflect the change in the current month compared with the previous month. A value of 50 is neutral, while less than 50 denotes contracting non-manufacturing activity and greater than 50 denotes expanding activity.

Figure 1 breaks down the composite index and sub-indexes. The business activity sub-index was high this month at 55.3, while the imports sub-index was 46.3.

The 18 services industries reporting growth in June — listed in order — are: Mining; Management of Companies & Support Services; Other Services; Construction; Arts, Entertainment & Recreation; Utilities; Public Administration; Wholesale Trade; Health Care & Social Assistance; Professional, Scientific & Technical Services; Transportation & Warehousing; Accommodation & Food Services; Retail Trade; Finance & Insurance; Agriculture, Forestry, Fishing & Hunting; Information; Real Estate, Rental & Leasing; and Educational Services. No industry reported a decrease in the month of June.

“(Interest) rate increases have slowed sales but have not helped with supply challenges yet.” [Construction]

At Gerdau, we closely monitor the ISM non-manufacturing index since it is an excellent barometer of the present strength, as well as a window on the likely short-run future, of the U.S. non-manufacturing economy. We have seen that a strengthening non-manufacturing economy translates to improved steel consumption.