Non-Manufacturing Industries Still Contracting

Washington, DC, Aug. 6, 2009--U.S. non-manufacturing industries contracted for the 10th consecutive month in July, the Institute for Supply Management reported Wednesday.

The ISM non-manufacturing index fell to 46.4% in July from 47% in June.

Economists expected a small increase to 48%. The index had risen three months in a row. The index bottomed at 37.4% in November.

Readings under 50% indicate that most firms say business is still getting worse, or at least not getting better. The index has been below 50% for 10 straight months.

Seven of 18 industries were growing in July, led by real estate, entertainment and agriculture. "The majority of respondents' comments reflect a sense of uncertainty and cautiousness about business conditions," ISM said.

The new orders index fell to 48.1% from 48.6%. The business activity (production) index fell to 46.1% from 49.8%. The prices-paid index dropped to 41.3% from 53.7%. The employment index fell to 41.5% from 43.4%.