The non-manufacturing sector in the US took another big hit in November, after a steep drop-off the previous month, according to the Institute of Supply Management’s non-manufacturing index. The prevailing credit crisis, as well as the continuing housing contraction, has finally reached all facets of the economy, as the services sector is now feeling a lot of pain. The NMI came in at a record low of 37.3%, deep in recessionary levels, down from 44.4% in October. Economists had forecast a number at 42.7%. Readings above 50% indicate growth, and anything below, contraction.

Last 11 Months

Month NMI Month NMI
Nov 2008 37.3 May 2008 51.7
Oct 2008 44.4 Apr 2008 52.0
Sep 2008 50.2 Mar 2008 49.6
Aug 2008 50.6 Feb 2008 49.3
Jul 2008 49.5 Jan 2008 44.6
Jun 2008 48.2    

The Business Activity Index also felt the pain. The index came in at 33%, down from 44.2%, and also a record low. The new-orders index plunged to 35.4% from 44.0%, and the employment index fell to 31.3% from 41.5%. The prices paid index declined to 36.6% from 53.4%, a dramatic reversal in prices in a matter of only a few months. In September, that number stood at 70%.

Report Details

Only one industry reported growth in November- Health Care & Social Assistance.

Contraction was reported in 17 industry segments- Transportation & Warehousing; Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Professional, Scientific & Technical Services; Finance & Insurance; Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Public Administration; Educational Services; Management of Companies & Support Services; Mining; Wholesale Trade; Utilities; Other Services*; Retail Trade; Construction; and Information.

*Other Services include: Equipment & Machinery Repairing; Promoting or Administering Religious Activities; Grantmaking; Advocacy; and Providing Dry-Cleaning & Laundry Services, Personal Care Services, Death Care Services, Pet Care Services, Photofinishing Services, Temporary Parking Services, and Dating Services.

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