Non-Manufacturing Index at 59.7%, Indicating Stronger than Expected Growth

A Walmart employee who serves as a “customer host,” walks in front of the customer service desk at a Walmart super-center location in Gainesville, Florida. (Photo: Laura Baris/People’s Pundit Daily/PPD)

The Institute for Supply Management (ISM) Non-Manufacturing Index (NMI) found U.S. service sector growth in February was stronger than expected.

The consensus forecast was 57.2 ranging from a low of 56.0 to a high of 58.0. The NMI came in at 59.7%, indicating solid and stronger than anticipated sector growth.

The Non-Manufacturing Business Activity Index increased to 64.7%, which is 5 points higher than the reading of 59.7% in January. That suggests growth for the 115th consecutive month, at a faster rate in February.

“According to the NMI, all 18 non-manufacturing industries reported growth,” Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee, said. “The non-manufacturing sector’s growth rate rebounded in February after cooling off in January.”

“Respondents are concerned about the uncertainty of tariffs, capacity constraints and employment resources; however, they remain mostly optimistic about overall business conditions and the economy.”

The New Orders Index came in well above the threshold indicating strength at 65.2%, a gain of 7.5 percentage points from the reading of 57.7% in January.

That is solid and sustainable growth.

The Employment Index fell 2.6 percentage points in February to 55.2% from the January reading of 57.8%. The Prices Index also fell 5 percentage points from the January reading of 59.4% to 54.4%, indicating that prices increased in February for the 21st consecutive month.

Panel Responses By Industry