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The ISM non-manufacturing index slid to 52.6 in September from 56.4 in August and lower than the 55.0 expected to a three year low. The cost of tariffs has been impacting the supply side and consumer uncertainty.

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Highlights from the service sector PMI

  • Services ISM 52.6 from 56.4 Prior
  • Estimates ranged from 54.0 to 57.5
  • Prices paid 60.0 versus 58.2 last month
  • New orders 53.7 versus 60.3 last month
  • Employment 50.4 versus 53.1 last month - lowest since Feb 2014
  • Backlog of orders 54.0 versus 49.0 last month
  • Inventory change 53.0 versus 55.0 last month
  • Inventory sentiment 58.0 versus 56.0 last month
  • New export orders 52.0 versus 50.5 last month
  • Imports 49.0 versus 50.5 last month
  • Business activity 55.2 vs 61.5 last month

 

Comments:

"Tariffs are adding uncertainty to short-term pricing on certain commodities, but suppliers are finding alternate solutions. The bigger impacts appear to be on demand side, which is driving short-term favorability in certain domestic markets." (Accommodation & Food Services)

"Demand has been variable - up one month, down the next. I think customers are watching our input costs and buying ahead on the dips, to the extent that contracts allow." (Agriculture, Forestry, Fishing & Hunting)

"We are very busy right now [and] expect to be so for the next 12 months. We are still very shorthanded with qualified labor." (Construction) "Gearing up for the fourth quarter of 2019. On track to end the year generally as anticipated, considering interest-rate changes, trade and tariff issues and other economic indicators and trends." (Finance & Insurance)

"We continue with low patient census, which affects our orders and revenue." (Health Care & Social Assistance)

"As employee cost [wages] are increasing in this better economy, it is getting harder to fight price increases on goods and services." (Information)

"Costs are going up, from labor to chemicals to metals." (Management of Companies & Support Services)

"While Chinese tariffs are understandable, they are impacting our supply chain decisions. We are actively pursuing alternate sources for our China-based production. At this point, we have not passed on tariff costs to our customers, but we are evaluating all options." (Other Services)

"Business continues to pick up as we quickly approach Q4. Week by week, we inch closer to a much-anticipated holiday retail season, which requires not only last-minute buys, but a push to fill open positions." (Retail Trade)

Source: ISM

From The TrsdersCommunity News Desk

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