ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index increased by 0.2 points month on month (0.4% m/m) to 56.9 in August 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 60.9, while the imports sub-index was 48.2.

The 14 services industries reporting growth in August — listed in order — are: Mining; Real Estate, Rental & Leasing; Utilities; Construction; Educational Services; Information; Transportation & Warehousing; Wholesale Trade; Health Care & Social Assistance; Public Administration; Finance & Insurance; Management of Companies & Support Services; Professional, Scientific & Technical Services; and Other Services. The two industries reporting a decrease in the month of August are: Agriculture, Forestry, Fishing & Hunting; and Arts, Entertainment & Recreation.

“Some pullback on projects by clients, but activity is still strong for our company. This has alleviated some labor availability issues. Generally, there has been improvement in lead times and prices, but still longer and higher, respectively, than in 2021.” [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.