Wednesday, December 3, 2008

US Services Sector Shows Record Contraction

The Institute of Supply Management said that its monthly survey of business conditions in the non-manufacturing sector recorded a reading of 37.3 in November. The drop was 7.1 points from the previous month, a record monthly contraction. A reading of 50 and above indicates expansion.

The Non-Manufacturing Business Activity Index decreased 11.2 percentage points to 33 percent. The New Orders Index decreased 8.6 percentage points to 35.4 percent, and the Employment Index decreased 10.2 percentage points to 31.3 percent. These are the lowest levels for each of these indexes since they were first reported in 1997. The Prices Index decreased 16.8 percentage points to 36.6 percent in November, indicating a decrease in prices from October. This is the largest-ever one-month decline in the index and its lowest level since it was first reported in 1997.

Of the 18 industries surveyed only one – healthcare – reported growth.

The 17 industries reporting contraction in November were: Transportation & Warehousing; Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Finance & Insurance; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Public Administration; Educational Services; Management of Companies & Support Services; Mining; Wholesale Trade; Utilities; Other Services; Retail Trade; Construction; and Information.

The ISM doesn't break it down, but my guess is that the biggest hits are coming in investment banking and other financial services, plus construction

No comments:

Post a Comment