Non-Manufacturing ISM Shows Recovery

Non-manufacturing ISM (construction, retailing, banking, etc) rebounded in April, rising to 56 (consensus 53) following a two month decline to 52.4 in March. A reading above 50 indicates growth. Over the ten years the survey has been in existence, it has averaged 57.7. Services remain the growth area of the economy, and a rebound here is positive for economic expansion.

Thirteen of the fifteen industries reported growth in April. New orders rose, with export orders rising sharply to 55.5. Prices paid held steady, though there were numerous comments of concern about rising energy costs. A decline in inventories supports hope that the inventory correction is nearing an end.

Net, the headline figure was stronger than the components. Unlike many surveys, this survey does not aggregate the components to create the headline, but asks the questions separately.