DO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing

reports released across the country. The national report’s

information reflects the entire United States, while the regional

reports contain primarily regional data from their local vicinities.

Also, the information in the regional reports is not used in calculating

the results of the national report. The information compiled in this

report is for the month of July 2008.

TEMPE, Ariz.–(EMWNews)–Economic activity in the non-manufacturing sector contracted in

July, 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) increased 1.3 percentage points in July to

49.5 percent, indicating contraction for the second consecutive month in

the non-manufacturing sector. The Non-Manufacturing Business Activity

Index decreased 0.3 percentage point to 49.6 percent. The New Orders

Index decreased 0.7 percentage point to 47.9 percent, and the Employment

Index increased 3.3 percentage points to 47.1 percent. The Prices Index

decreased 3.7 percentage points to 80.8 percent in July, indicating a

slower rate in price increases than in June. According to the NMI, nine

non-manufacturing industries reported growth in July. Members’

comments in July indicate concern about inflationary pressures and the

effect on the economy. Respondents’ comments

are mixed about business conditions and vary by industry and company.”

INDUSTRY PERFORMANCE (Based on the NMI)

The nine industries reporting growth in July based on the new NMI

composite index — listed in order —

are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation;

Other Services(d); Professional, Scientific & Technical Services;

Educational Services; Utilities; Construction; Accommodation & Food

Services; and Health Care & Social Assistance. The six industries

reporting contraction in July are: Finance & Insurance; Public

Administration; Wholesale Trade; Information; Transportation &

Warehousing; and Retail Trade.

WHAT RESPONDENTS ARE SAYING …

• “Our business remains at about the same

  level as the previous month, with continued focus on cost reduction.”

  (Finance & Insurance)

• “The general state of the home-building

  industry has not changed since last month; however, with the commodity

  and code changes going into 2009, we face much higher construction

  costs and reduced margins across the entire supply chain.”

  (Construction)

• “Continue to see slowdown in local economy.”

  (Health Care & Social Assistance)

• “While still positive, the overall outlook

  for 2008 for our company is not as high as earlier in the year.”

  (Wholesale Trade)

• “Governmental spending for services is up

  this period.” (Professional, Scientific &

  Technical Services)

ISM NON-MANUFACTURING SURVEY RESULTS AT A GLANCE COMPARISON OF ISM NON-MANUFACTURING AND ISM MANUFACTURING SURVEYS(a) JULY 2008
Index		Non-Manufacturing												Manufacturing
		Series Index July		Series Index June		Percent Point Change		Direction		Rate of Change		Trend(b) (Months)		Series Index July		Series Index June		Percent Point Change
NMI/PMI		49.5		48.2		+1.3		Contracting		Slower		2		50.0		50.2		-0.2
Business Activity/ Production		49.6		49.9		-0.3		Contracting		Faster		2		52.9		51.5		+1.4
New Orders		47.9		48.6		-0.7		Contracting		Faster		2		45.0		49.6		-4.6
Employment		47.1		43.8		+3.3		Contracting		Slower		3		51.9		43.7		+8.2
Supplier Deliveries		53.5		50.5		+3.0		Slowing		Faster		4		55.1		55.1		0.0
Inventories		54.5		53.0		+1.5		Growing		Faster		3		45.0		51.2		-6.2
Prices		80.8		84.5		-3.7		Increasing		Slower		62		88.5		91.5		-3.0
Backlog of Orders		52.0		49.0		+3.0		Growing		From Contracting		1		43.0		47.5		-4.5
New Export Orders		47.5		52.0		-4.5		Contracting		From Growing		1		54.0		58.5		-4.5
Imports		49.0		50.5		-1.5		Contracting		From Growing		1		46.5		46.0		+0.5
Inventory Sentiment		62.5		60.0		+2.5		“Too High”		Faster		134		N/A		N/A		N/A
Customers’ Inventories		N/A		N/A		N/A		N/A		N/A		N/A		47.0		55.0		-8.0

(a) Non-Manufacturing ISM Report On Business^®

data is seasonally adjusted for Business Activity, New Orders,

Prices and Employment. Manufacturing ISM Report On Business^®

data is seasonally adjusted for New Orders, Production, Employment,

Supplier Deliveries and Inventories.

(b) Number of months moving in current direction

COMMODITIES REPORTED UP / DOWN IN

PRICE, and IN SHORT SUPPLY

Commodities Up in Price

A/C Parts; Airfares (5); Air Freight; Auto Fuel (2); Bacon (2); Bath

Tissue (2); Batteries; Beef (5); Bond Paper; Bread (3); Building

Materials; Butter; Carbon Pipe (2); Cereal (2); Computer Peripherals;

Computer Products and Supplies; Copier Paper (6); Copper (3); Crab Legs;

Dairy (2); Deliveries (2); Diesel Fuel (10); # 1 Diesel Fuel (3); # 2

Diesel Fuel (3); Flour; Food and Beverage (3); Food Products (3);

Freight Charges (2); Freight Fuel Surcharges (2); Fresh Food Items; Fuel

(18); Fuel Products (2); Fuel Surcharges (3); Gasoline(c) (11); Gasoline

Related (3); Gloves; Green Beans; # 2 Heating Fuel; Laptop Computers;

Lubricants; MRO Supplies; Natural Gas (2); Office Equipment; Paper (9);

Paper Products (5); Petroleum Based Products; Plastic Can Liners (2);

Plastic Films (2); Plastic Products; Plumbing Supplies; Poly Bags (2);

Red Peppers; Shipping Costs (5); Soy; Stainless Steel Products (3);

Steel (5); Steel Pipe and Fittings (2); Steel Products (3);

Transportation Costs (3); Transportation Services (2); Travel Costs; and

Valves.

Commodities Down in Price

Cable (2); Cheese; and Gasoline(c).

Commodities in Short Supply

Carbon Pipe and Sulfuric Acid are the only commodities reported in short

supply.

Note: The number of consecutive months the commodity is listed is

indicated after each item.

(c) Indicates reported both up and down in price.

JULY 2008 NON-MANUFACTURING INDEX SUMMARIES

NMI (Non-Manufacturing Index)

Beginning with the January 2008 Non-Manufacturing Report On Business^®,

a composite index is now calculated as an indicator of the overall

economic condition for the non-manufacturing sector. The NMI is a

composite index based on the diffusion indexes for four of the

indicators with equal weights: Business Activity (seasonally adjusted),

New Orders (seasonally adjusted), Employment (seasonally adjusted) and

Supplier Deliveries. July’s NMI at 49.5

percent indicates contraction in the non-manufacturing sector for the

second consecutive month. A reading above 50 percent indicates the

non-manufacturing sector economy is generally expanding; below 50

percent indicates the non-manufacturing sector is generally contracting.

The industries reporting growth in July are: Real Estate, Rental &

Leasing; Arts, Entertainment & Recreation; Other Services(d);

Professional, Scientific & Technical Services; Educational Services;

Utilities; Construction; Accommodation & Food Services; and Health Care

& Social Assistance. The industries reporting contraction in July are:

Finance & Insurance; Public Administration; Wholesale Trade;

Information; Transportation & Warehousing; and Retail Trade.

NMI HISTORY

					Month						NMI
					July 2008						49.5
					June 2008						48.2
					May 2008						51.7
					April 2008						52.0
					March 2008						49.6
					February 2008						49.3
					January 2008						44.6

Business Activity

ISM’s Non-Manufacturing Business Activity

Index in July registered 49.6 percent, a decrease of 0.3 percentage

point when compared to the 49.9 percent registered in June. Eight

industries reported increased business activity, and six industries

reported decreased activity for the month of July. Four industries

reported no change from June. Comments from respondents include: “Less

group business than forecast”; “Inflationary

pressures — general business slowdown”;

and “Careful spending.”

The industries reporting growth of business activity in July are: Real

Estate, Rental & Leasing; Transportation & Warehousing; Arts,

Entertainment & Recreation; Other Services(d); Professional, Scientific

& Technical Services; Educational Services; Health Care & Social

Assistance; and Utilities. The industries reporting decreased business

activity in July are: Public Administration; Finance & Insurance;

Wholesale Trade; Retail Trade; Management of Companies & Support

Services; and Information.

Business Activity						%Higher					%Same					%Lower					Index
July 2008						24					51					25					49.6
June 2008						28					52					20					49.9
May 2008						32					50					18					53.6
April 2008						29					53					18					50.9

THE LAST 12 MONTHS

					Month						Business Activity Index											Month						Business Activity Index
					July 2008						49.6											Jan 2008						41.9
					June 2008						49.9											Dec 2007						54.4
					May 2008						53.6											Nov 2007						54.6
					Apr 2008						50.9											Oct 2007						55.5
					Mar 2008						52.2											Sep 2007						55.7
					Feb 2008						50.8											Aug 2007						56.3
					Average for 12 months – 52.1 High – 56.3 Low – 41.9

New Orders

ISM’s Non-Manufacturing New Orders Index

contracted in July for the second consecutive month. The index decreased

0.7 percentage point to 47.9 percent from the 48.6 percent registered in

June. Comments from respondents include: “Mid-market

business is very slow”; “Advertisers

cutting spending”; and “Business

is slowing.”

Industries reporting growth of new orders in July are: Real Estate,

Rental & Leasing; Other Services(d); Management of Companies & Support

Services; Arts, Entertainment & Recreation; Utilities; Educational

Services; and Professional, Scientific & Technical Services. The

industries reporting contraction of new orders in July are: Public

Administration; Finance & Insurance; Wholesale Trade; Information; and

Retail Trade.

New Orders

%Higher

%Same

%Lower

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