ISM: Non-Manufacturing Sector Growth Picks Up in June

The ISM Non-Manufacturing Index grew in June following two consecutive months of contraction. The index registered 57.1%, 11.7 percentage points higher than the May reading. This is the largest single-month percentage-point increase in the index since its debut in 1997.

Fourteen of the eighteen non-manufacturing industries reported growth. Many respondents “remain concerned about the coronavirus and the more recent civil unrest; however, they are cautiously optimistic about business conditions and the economy as businesses are beginning to reopen.”

The Business Activity Index registered 66.0% in June, a 25 percentage-point increase from the May reading of 41.0%. This represents growth after three consecutive months of contraction.

Non-manufacturing employment contracted for the fourth month in a row and registered 43.1%, an increase of 11.3 percentage points from the May reading of 31.8%. Three industries reported increased employment.

The New Orders Index registered 61.6%, an increase of 19.7 percentage-points from the May reading of 41.9%. This is the first month of growth after two months of consecutive contraction in New Orders. Comments from respondents include: “Customers releasing work orders” and “More activity due to lifting of restrictions.”

Supplier deliveries remained slow as the index registered 57.5%, which is 9.5 percentage points below the 67.0% reported in May. A reading above 50% indicates slower deliveries.

Read the ISM release.