Earlier today, the Institute for Supply Management reported that its index measuring the economy's non-manufacturing activity during May came in at a reading of 65.2, down from April's result of 68.4. This measure operates in the same manner as ISM's manufacturing index: A reading above 50.0 indicates sector expansion.
However, the non-manufacturing index's price component took a substantial hike in May, rising to 74.4 from April's 68.6. Moreover, ISM reported that 55% of its survey respondents reported higher prices during the month, with 3% reporting lower ones. This compared with a 26%/4% split as recently as January.
The following table examines the ISM prices-paid data over 2004's first five months.
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INSTITUTE FOR SUPPLY MANAGEMENT
NON-MANUFACTURING INDEX -- TOTAL
INDEX AND PRICES-PAID COMPONENT
(Price Index Is Seasonally Adj.)
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Respondents Reporting
Higher, Lower, or
Unchanged Prices
Month/ Overall Price ---------------------
Year Index Index Higher Lower Unch.
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05/04 65.2 74.4 55% 3% 42%
04/04 68.4 68.6 53% 3% 44%
03/04 65.8 65.7 43% 3% 54%
02/04 60.8 57.3 31% 9% 60%
01/04 65.7 59.7 26% 4% 70%
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The ISM employs a very comprehensive list of commodities and services to determine the price trends in its two indexes. I thought readers would be interested in what they are. The commodities that are surveyed to determine the prices paid by manufacturing organizations:
Aluminum; Aluminum Extrusions; Aluminum Sheet; Butadiene; Cardboard; Caustic Soda; Chemicals; Coal; Copper and Copper Products; Corrugated Containers; Corrugated Products; Crude Oil; Diesel Fuel; DRAMS; Eggs; Electric Components; Electric Motors; Electronic Components; Energy; Fasteners; Flash Memory; Freight; Fuel; Fuel Oil; Gasoline; Hardwood Lumber; HDPE; Integrated Circuits; Natural Gas; Nickel; Paper; Particle Board; Plastic Resin; Plastics; Plywood; Pulp; Stainless Steel; Stainless Steel Bars; Stainless Steel Products (various forms); Steel; Steel Products (various forms) and Steel Scrap.
The items that are surveyed to determine the prices paid by non-manufacturing organizations for purchased materials and services:
Air Conditioning and Parts; Airfares; Aluminum/Aluminum Products; Beef; Butter; Cable and Cable Wire; Carbon Steel; Cheese; Chicken; Computer Hardware; Conduit and Fittings; Copiers; Copier Paper; Copper; Copper Products including Pipe, Cable, Tubing, and Wire; Corn; Corrugated; Cotton Goods / Products; #2 Diesel Fuel; Dairy and Dairy Products; Electricity; Energy; Fittings; Fuel; Gasoline; #2 Heating Oil; Metal; Metal Products; Nickel; Oil; Pagers/Paging Services;
Paper; Paper Products; Petroleum-Based Products; Plastic; Plastic Bags; Polyethylene Films; Polypropylene; Pork; Poultry; Printed Materials; PVC/PVC Pipe and Fittings; Shipping Costs; Soy Oil; Soybean Meal; Stainless Steel; Stainless Steel Welding Wire/Electrode; Steel; Steel Beams; Steel Coil; Steel Pipe and Fittings; Steel Products (large variety); Steel-Related Products; Steel Scrap; Unleaded Gasoline and Valves.
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