ISM Non-Mfg Index For June 2008

June 2008 Non-Manufacturing ISM Report On Business®
NMI (Non-Manufacturing Index) at 48.2%

Business Activity Index at 49.9%
New Orders Index at 48.6%
Employment Index at 43.8%

(Tempe, Arizona) — Economic activity in the non-manufacturing sector contracted in June, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.
The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee; and senior vice president — supply management for Hilton Hotels Corporation. "The NMI (Non-Manufacturing Index) decreased 3.5 percentage points in June to 48.2 percent, indicating contraction after two consecutive months of growth within the non-manufacturing sector. The Non-Manufacturing Business Activity Index decreased 3.7 percentage points to 49.9 percent. The New Orders Index decreased 5 percentage points to 48.6 percent, and the Employment Index decreased 4.9 percentage points to 43.8 percent. The Prices Index increased 7.5 percentage points to 84.5 percent in June, indicating a faster rate in price increases than in May. The Prices Index is at its highest level since this report began. According to the NMI, eight non-manufacturing industries reported growth in June. Members' comments in June indicate that rising fuel, energy and commodity costs are negatively impacting their respective businesses. Respondents' comments are mixed on business conditions and the overall economy."

INDUSTRY PERFORMANCE (Based on the NMI)
The eight industries reporting growth in June based on the new NMI composite index — listed in order — are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Mining; Educational Services; Construction; Utilities; Information; and Wholesale Trade. The eight industries reporting contraction in June are: Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Other Services*; Health Care & Social Assistance; Finance & Insurance; Public Administration; Management of Companies & Support Services; and Retail Trade.

WHAT RESPONDENTS ARE SAYING ...
"Oil prices are affecting most every supplier we have." (Transportation & Warehousing)
"Energy costs are beyond the pain point. They are disruptive to every part of our business." (Agriculture, Forestry, Fishing & Hunting)
"Challenging due to continuing cost pressure from suppliers. Planning on decreased production activity as summer wears on and budgets tighten." (Other Services*)
"High cost of commodities, fuel prices, are impacting margins and economic conditions are negatively impacting traffic counts and average check amounts." (Accommodation & Food Services)
"Energy cost is starting to have an effect on cost of products from all sectors." (Wholesale Trade)