Thursday, September 3, 2009

ISM Services (August)

ISM respondents report:

  • "While there are promising signs in the economy pointing toward the beginnings of a recovery, the financial services industry continues to be significantly affected by the downturn. Expectations are that the pace will begin to change by Q4 '09." (Finance & Insurance)
  • "Business is still soft due to overall economic conditions." (Wholesale Trade)
  • "There seems to be a more positive feeling about the economy." (Educational Services)
  • "Healthcare reform still has hospitals wondering how they are going to get paid at the end of the day." (Health Care & Social Assistance)
  • "Occupancy shows continued strength for the summer season, still below previous years' averages by 15% to 25%." (Accommodation & Food Services)
  • "Business steady — revenue down slightly; however, less than expected." (Arts, Entertainment & Recreation)
  • "Good first half results. Some evidence of consumers 'trading down.' Supplier lead times are very short." (Agriculture, Forestry, Fishing & Hunting)

Wow... still an overall contraction, but check out the pricing power. Anyone understand the cause?


  1. hmmm...interesting! What would it be YtD...or better downturn to date. Would pricing power still be ahead?

  2. dblwyo... even YOU couldn't convert this to a YTD figure with it being an improvement on the margin survey...

  3. Jake,

    it´s not pricing power, it´s prices PAID.

    "Prices paid by non-manufacturing organizations for purchased materials and services increased significantly in August. ISM's Non-Manufacturing Prices Index for August registered 63.1 percent, 21.8 percentage points higher than the 41.3 percent reported in July. In August, the percentage of respondents reporting higher prices is 23 percent, the percentage indicating no change in prices paid is 71 percent, and 6 percent of the respondents reported lower prices."


    "Commodities Up in Price:

    Airfares*; Beef; Cheese; Copper Wire; #1 Diesel Fuel; #2 Diesel Fuel; Fuel; Gasoline; and Polyethylene Film.

    Commodities Down in Price:

    Airfares*; Juice; Natural Gas (4); and Office Supplies (2)."

    as i see no pricing power this should result in weaker margins for the service sector.