Daily Economic Update: ISM Non-Manufacturing Index

Each day the Research staff takes a look at recently released economic indicators, addressing what these indicators mean for REALTORS® and their clients. Today’s update highlights the ISM Non-Manufacturing index.

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  The ISM Non-Manufacturing index fell from 59.7% in February to 57.3% in March.  The employment, business activity, new orders and supplier deliveries portions of the index were all above 50 implying that each had expanded.  However, each sector had slowed from February with the sharpest decline of 7.2% felt in the business activity index.
• Of concern to respondents were rising fuel and commodity prices as well as the ramifications of the tsunami and nuclear disaster in Japan on the supply-chain to U.S. manufacturing.
• According to survey respondents, both the real estate and rental and leasing industries showed growth in March.  In addition, one respondent noted an improvement in business conditions for construction and “an increase in qualified customers.”
• The slowdown of the March ISM index reflects global concerns about events in Libya and Japan, but the index suggests that growth, though muted, continues.  High gas prices impact REALTORS® on a daily basis.  However, this report suggests that real estate professionals are seeing improvement on both the sales and rental sides suggesting that the market has regained much of its footing after last summer’s sharp decline.  The current housing market is comparable to the same time last year when a Federal tax credit was in place.