Tempe, AZ, August 3--Business activity in the non-manufacturing sector increased in July 2005, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business.
The report was issued today by Ralph G. Kauffman, Ph.D., C.P.M., chair of the Institute for Supply Management Non-Manufacturing Business Survey Committee and coordinator of the Supply Chain Management Program, University of Houston-Downtown.
"Non-manufacturing business activity increased for the 28th consecutive month in July," Kauffman said. He added, "Business activity increased at a slower rate in July than in June. New Orders and Backlog of Orders increased faster but Employment increased more slowly in July than in June. With the exception of the increase in the Prices Index, there were no unusually large changes in the indexes.
"The overall indication is continued economic growth in the non-manufacturing sector in July at about the same rate of increase as in June. Members' comments indicated that price increases are one of their primary concerns at the present time."
The 13 industries reporting growth in July — listed in order — are: Construction; Insurance; Entertainment; Mining; Transportation; Utilities; Communication; Retail Trade; Wholesale Trade; Business Services; Finance & Banking; Other Services*; and Public Administration. The two industries reporting activity the same as last month are: Real Estate and Health Services. The one industry reporting decreased activity from the prior month is Agriculture.
WHAT RESPONDENTS ARE SAYING …
"Continued increases in oil are having direct impact on product and service pricing. Political unrest continues to restrict business activities in various regions and countries." (Business Services)
"Continue to deal with long leadtimes and higher prices on special fabricated and manufactured equipment, anything made of alloy steels." (Mining)
"The overall cost of doing business is holding firm except for the cost of fuel." (Other Services)
"Price of energy continues to shake us to the core. We are finding it harder to stabilize or predict future pricing, transportation, etc. Our manufacturers appear to be struggling with pricing effects and we are seeing some good suppliers begin to weaken from not passing [price] increases through the supply chain sooner." (Retail Trade)
"June was a surprisingly strong sales month." (Wholesale Trade)
"The increasing energy costs for heating oil, diesel fuel, and natural gas and what to do for next year's supply contracts are occupying much staff time." (Public Administration)
