EmailThe ISM Non-manufacturing Index decelerated for a second consecutive month, falling from 53.3 in June to 52.7 in July. The Briefing.com consensus expected the ISM Non-manufacturing Index to increase to 53.7.
Production/business activity rebounded in July, as the index increased from 53.4 in June to 56.1. The growth, however, came primarily from the usage of backlogs and not from new orders. New orders growth slowed as the index dropped from 53.6 to 51.7. The contraction in backlogs accelerated with the index declining from 48.5 in June to 44.0 in July.
Without meaningful growth in new orders next month, there may not be enough order backlogs to keep production/business activities expanding. It would not be a surprise to see production contract for the first time in two years.
The employment index fell from 54.1 in June to 52.5 in July, but the decline should have little effect on the July payroll numbers.
