ISM for Services Indicates Consistent Growth

Zacks

The ISM for Non-Manufacturing Index showed expansion for the 37th month in January. January's index came in at 55.2%, lower than the 55.7% in December but any reading above 50 indicates expansion.

The service sector has showed strength for the past several years. There hasn't been any recent scares where it seemed like contraction was imminent.

Drilling down into the sub-segments, you can see that this report was pretty solid.

The most encouraging sub-index was the Employment Index. It rose to 57.5% from 55.3% in December. It has been above 50 for 6 months.

The New Orders Index fell to 54.4% from 58.3% in December and Business Activity also declined to 56.4% from 60.8% previously. But both of those indexes have shown expansion for 42 months.

Where's the Growth?

The 8 service industries showing growth in January were:

Agriculture, Forestry, Fishing & Hunting
Management of Companies & Support Services
Construction
Public Administration
Finance & Insurance
Professional, Scientific & Technical Services
Real Estate, Rental & Leasing
Mining

9 industries showed contraction.

It's encouraging to see both construction and real estate making the list of growing industries.

Does this data simply indicate more of the same for the economy?

 

Zacks Investment Research



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