Non-Manufacturing index jumped 2.5 points

Texas Border Business

The ISM Non-Manufacturing Index jumped 2.5 points in February to 53.0. This is the second consecutive month that the index has come in above the benchmark of 50, illustrating that demand is beginning to improve outside of the manufacturing sector.

Business activity picked-up with the index rising to 54.8 from 52.2. Furthermore, the new orders index came in strong at 55, indicating that business activity could continue to grow in the near-term. Also, the supplier deliveries index rose to 53.5 from 50.5, indicating that deliveries were slower due to greater demand.

The employment situation is stabilizing according to the ISM. The index rose to 48.6 from 44.6, illustrating that the decline in employment is slowing. According to the ADP Employment Report and the Non-Farm Payrolls report, the services sector is leading the labor market recovery. The index’s results indicate that the economy could experience further improvement in services sector employment.  

Bottom-line:  The improvement in the ISM Non-Manufacturing Index illustrates that economic activity is improving across a wider base. These results are consistent with our expectation of economic growth in 1Q10.

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