It is highly likely that signs of growth and possibly economic recovery will be visible by the end of this year, according to the results of the latest non-manufacturing industry survey by the Institute for Supply Management (ISM).
The ISM has been making such a prediction for some time now, and the report on business activity in the non-manufacturing sector in June indicate the economy is definitely headed in that direction, said Anthony Nieves, chair of ISM’s non-manufacturing business survey committee.
“The report is encouraging,” he said.
Overall, the non-manufacturing index went up three percentage points in June to 44 percent. Technically, anything under 50 percent is considered to be “contracting,” but Nieves said the trend over the last few months has been a positive one, indicating that the index is creeping steadily upward, indicating a gradual improvement in the overall non-manufacturing sector.
“I think we’re seeing the signs of the leveling off,” he said.
Nieves said he was especially encouraged by the business activity and new orders indexes. Business activity leapt up 7.4 percentage points to 49.8 percent, while new orders went up 4.2 points to 48.6 percent.
Nieves said he will be watching both indices over the next few months, especially new orders, to verify that the growth trend overall is continuing.
The employment index, which typically lags behind everything else, also took a jump in June. According to the report, it went up 4.4 points to 43.4 percent, but despite this increase, Nieves said employment tends to be the slowest to react to changes, even positive ones, in the overall sector.
Read the rest of the scmr.com article here.
Tuesday, July 7, 2009
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