ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index decreased by 1.2 points month on month (-2.3% m/m) to 49.4 in April 2024.

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 50.9, while the imports sub-index was 53.6.

The 12 services industries reporting growth in April — listed in order — are: Accommodation & Food Services; Construction; Agriculture, Forestry, Fishing & Hunting; Utilities; Mining; Management of Companies & Support Services; Educational Services; Retail Trade; Finance & Insurance; Health Care & Social Assistance; Public Administration; and Wholesale Trade. The six industries reporting a decrease in the month of April — listed in order — are: Other Services; Information; Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; and Transportation & Warehousing.

“Although it varies by global region, we’re starting to see market softening in terms of price and lead time stability. That bidders are providing reasonable bid validities is an indication that much of the supply chain is coming into supply and demand equilibrium. Electrical equipment remains the outlier.” [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.