Following closely on the heels of a dour report on manufacturing activity issued on Monday morning
by the Institute for Supply Management, the Arizona-based trade group, that same group issued data within the past hour on the non-manufacturing sector
. This survey covers the critical services arena, which accounts for the majority of domestic economic output, or the gross domestic product.
And, in a welcome development, the ISM reported that this sector had nudged up a bit last month, with its survey coming in at a solid reading of 54.0. That was better than both the December result of 53.0 and the forecast level of 53.5. It should be noted that a survey result in excess of 50.0 denotes a non-manufacturing sector that is expanding; a reading below that threshold implies that this economic area is undergoing a contraction.
To recap, on Monday, the ISM reported that manufacturing had come in at 51.3; although that suggested further growth in this important category, the result was well below both the December reading of 56.5 and the expectation of 56.0. There was no such disappointment growing out of this latest survey.
Meanwhile, the January result was more or less in line with the average for the last 12 months, which was 54.6. The range over this span has been 53.0 to 57.9. Also, of the categories gauged, we saw gains in strength in business activity, new orders, employment, supplier deliveries, and prices. Although the month-to-month changes were generally modest, in the main, the improvement was fairly broad based.
As to respondents, the aggregate assessment seems to be that things are improving slowly, but clearly. In sum, it was a welcome report, especially following the dour issuance on Monday by the ISM.At the time of this article's writing, the author did not have positions in any of the companies mentioned.