This afternoon at 3 p.m. London time, United States Institute for Supply Management will publish the latest ISM Non-Manufacturing PMI, which is also known as the Services PMI and the Non-Manufacturing ISM Report on Business.
The Services PMI report is released monthly and usually on the third business day after the end of a month.
The survey takes into account the responses by around 400 purchasing managers, who are asked to give their opinion and rate the current business climate. The scope is broad with employment, production, new orders, prices, supplier deliveries, and inventories taken into account by purchasing managers.
The ISM Non-Manufacturing PMI is viewed as a leading indicator, as purchasing managers hold the most current data that can influence the decisions of senior company management. Purchasing managers therefore are well placed to ascertain short-term risks and opportunities.
The final result of all respondents is compiled into an index that reflects the opinion of all PMI contributors, with PMI readings of above 50.0 indicating expansion and below this threshold indicating contraction.
Since January 2010, the ISM Non- Manufacturing PMI reading has remained above the 50.0 mark, and this is a reflection on the overall positive business environment and the confidence of the services sector among purchasing managers.
For example, during the global financial crisis, the ISM Manufacturing PMI reading in January 2009 fell to 32.4.
The forecast for today is the ISM will report a Services PMI of 54.1, which will be a slight improvement in the prior month's 53.4.