ISM Non-Manufacturing Index: The Institute for Supply Management’s non-manufacturing index increased by 1.8 points month on month (3.2% m/m) to 58.3 in March 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 55.5, while the imports sub-index was 45.0.

The 17 services industries reporting growth in March — listed in order — are: Educational Services; Arts, Entertainment & Recreation; Utilities; Construction; Wholesale Trade; Accommodation & Food Services; Other Services; Real Estate, Rental & Leasing; Information; Transportation & Warehousing; Public Administration; Retail Trade; Management of Companies & Support Services; Finance & Insurance; Professional, Scientific & Technical Services; Mining; and Health Care & Social Assistance. The only industry reporting a decrease in March is Agriculture, Forestry, Fishing & Hunting.

“Pricing pressures are stronger than ever due to the Russia-Ukraine [war], and energy costs are skyrocketing.” [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.