August's ISM services index (non-manufacturing) came in at 51.5 vs. 53 expected, and 54.3 in July.

ISM:

"The NMI (Non-Manufacturing Index) registered 51.5 percent in August, 2.8 percentage points lower than the 54.3 percent registered in July, indicating continued growth in the non-manufacturing sector but at a slower rate. The Non-Manufacturing Business Activity Index decreased 3 percentage points to 54.4 percent, reflecting growth for the ninth consecutive month, but at a slower rate than in July. The New Orders Index decreased 4.3 percentage points to 52.4 percent, and the Employment Index decreased 2.7 percentage points to 48.2 percent, reflecting contraction after one month of growth. The Prices Index increased 7.6 percentage points to 60.3 percent in August, indicating that prices increased significantly in July. According to the NMI, nine non-manufacturing industries reported growth in August. Respondents' comments continue to be mixed about business conditions and the state of the overall economy."

INDUSTRY PERFORMANCE (Based on the NMI)

The nine industries reporting growth in August based on the NMI composite index — listed in order — are: Arts, Entertainment & Recreation; Construction; Real Estate, Rental & Leasing; Educational Services; Transportation & Warehousing; Finance & Insurance; Accommodation & Food Services; Information; and Wholesale Trade. The eight industries reporting contraction in August — listed in order — are: Agriculture, Forestry, Fishing & Hunting; Mining; Professional, Scientific & Technical Services; Management of Companies & Support Services; Utilities; Retail Trade; Health Care & Social Assistance; and Public Administration.

WHAT RESPONDENTS ARE SAYING ...

• "In general, sales have increased slightly compared to the same period last year. However, [sales] are still significantly less than the same period two years ago." (Public Administration)
• "Continuing to show signs of positive growth." (Construction)
• "Business is pretty stagnant; starting to see price erosion in our selling markets." (Agriculture, Forestry, Fishing & Hunting)
• "Due to general economic conditions, we are finding more aggressive pricing and deals to win business in the competitive marketplace." (Health Care & Social Assistance)
• "We are anticipating a slowdown in the third and fourth quarter of this year, with no signs of recovery for the next few quarters." (Professional, Scientific & Technical Services)
• "Purchasing has been cut back to meet expenses. As a result, some segments of company revenue have been negatively impacted." (Retail Trade)

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