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                                               ISM Non-Manufacturing Index

Since the index is based on data collected from purchasing managers and supply executives, it is a leading indicator of U.S. economic health. A reading above 50 signifies growth in the non-manufacturing sector, and is seen as positive (or bullish) for the USD, whereas a figure below 50 is seen as negative (or bearish) for the USD. Interestingly, the ISM Non-Manufacturing Index has less market impact compared to the ISM Manufacturing report because non-manufacturing data tends to be more cyclical and predictable.

Historical Overview of ISM Non-Manufacturing Index:

Understanding ISM Non-Manufacturing Index:

The Non-Manufacturing Index released by the Institute for Supply Management (ISM) is a gauge of business conditions in U.S. non-manufacturing industries. The report is based on data compiled from a survey of more than 375 purchasing and supply executives in over 62 different non-manufacturing industries across the United States, including agriculture, construction, mining, communications, transportation, wholesale trade and retail trade. A composite diffusion index is created based on the data from these surveys. The index has four equally weighted components: business activity, new orders, employment, and supplier deliveries. A reading above 50 indicates an expansion in the non-manufacturing sector, and a figure below 50 indicates that it is generally declining. While the ISM manufacturing index has a long history that dates to the 1940s, the non-manufacturing report is relatively new, and is being published since June 1998.

Comparison between ISM Manufacturing and Non-Manufacturing Indexes:

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