U.S. non-manufacturing sector grew in March
The NMI registered 52.5 percent, 4.8 percentage points lower than the February reading of 57.3 percent.
This represents continued growth in the non-manufacturing sector, at a slower rate.
The Non-Manufacturing Business Activity Index decreased to 48 percent, 9.8 percentage points lower than the February reading of 57.8 percent, reflecting contraction for the first time since July 2009, when the index registered 47.2 percent.
The New Orders Index registered 52.9 percent, 10.2 percentage points below the reading of 63.1 percent in February.
The Employment Index decreased 8.6 percentage points to 47 percent from the February reading of 55.6 percent.
"The Supplier Deliveries Index registered 62.1 percent, up 9.7 percentage points from the February reading of 52.4 percent, and limited the decrease in the composite NMI.
The Supplier Deliveries Index is one of four equally weighted subindexes that directly factor into the NMI, along with Business Activity, New Orders and Employment.
Supplier Deliveries is the only ISM Report On Business index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.
However, the high percentage-point increase in March — the largest monthly change since an 18.5-point decrease in September 1997 — was primarily a product of supply problems related to the coronavirus (COVID-19).
The Prices Index of 50 percent is 0.8 percentage point lower than the February reading of 50.8 percent, indicating that prices were unchanged in March.
According to the NMI, nine non-manufacturing industries reported growth.
The non-manufacturing sector composite index indicates growth in March; however, the extreme slowing of supplier deliveries weighted heavily in the calculation.
The other three subindexes that contribute to the NMI contracted strongly in March.
Respondents are concerned about the coronavirus impact on the supply chain, operational capacity, human resources and finances, as well as the ramifications for the overall economy. ■