ISM Non-Manufacturing Business Activity

The Business Activity Index is the activity gauge in the ISM Services PMI Report from the Institute for Supply Management (ISM). It was formerly called the Non-Manufacturing ISM Report On Business. It reflects purchasing and supply executives reporting activity as higher, same or lower versus the prior month for US operations.

The panel spans 18 industries classified by NAICS and weighted by each industry share of GDP. It runs monthly since 1997, covers services only and not manufacturing, and tracks breadth of change rather than output volume, revenue or yearly growth. It is not GDP.

Panelists report in the early part of the month through late in the month on US operations for that month. Most wait until late in the month to give the most accurate picture. ISM compiles the report for release on the third business day of the next month.

Release comes after 10:00 a.m. Eastern Time on the third business day, and on the fourth business day in January. The schedule shifts when the New York Stock Exchange is closed. The full text is posted at ismrob.org. June 2025 data, for example, was released at 10:00 a.m. Thursday, July 3, 2025.

Each release shows the Services PMI with all 10 sub-indexes and the shares reporting better, same or worse. Supplier Deliveries uses slower instead of better. Industries rank from most growing to most declining, with verbatim respondent comments and a methods box.

Raw answers never change. Four series carry seasonal adjustment with factors updated yearly, while 6 go out unadjusted. Readers track the level versus 50% and the monthly move.

Above 50% means expansion and below means decline, and distance from 50% shows strength. A 50% print means unchanged. For the composite, 48.6% corresponds over time with overall economic growth. ISM says to compare the data with all other sources when deciding.

Business Activity is 1 of 4 equal parts of the Services PMI. Other published indexes add demand and cost context outside the composite.

• Business Activity, 25%: whether services activity rose, held steady or fell versus the prior month.
• New Orders, 25%: incoming demand, whether new bookings rose, held steady or fell.
• Employment, 25%: hiring, whether payrolls rose, held steady or fell.
• Supplier Deliveries, 25%: speed of deliveries, where above 50% means slower delivery and below means faster, since it is inverted.
• Backlog of Orders, New Export Orders, Imports, Inventory Change, Inventory Sentiment, Prices: extra demand and cost context outside the composite.

In April 2020 the composite fell to 41.8%, down 10.7 points from 52.5%. It was the first contraction since December 2009. Business Activity fell 22 points to 26%, the lowest since the survey debut in 1997.

Only 2 industries grew while 16 declined. New Orders fell to 32.9% and employment to 30.0%. Supplier Deliveries hit an all-time high of 78.3%, up 16.2 points from 62.1%, as supply chains seized.

Deliveries, an equal fourth of the composite, limited the headline fall: (26.0 + 32.9 + 30.0 + 78.3) / 4 = 41.8. The publisher warned the surge reflected supply problems, not demand strength.

1. Collect answers: Panelists rate activity higher, the same or lower versus the prior month, giving shares for each.
2. Unadjusted diffusion: Add the higher share plus 0.5 times the same share, to 2 decimals. For example, 21.7% plus 0.5 times 61.1% equals 52.25.
3. Seasonal adjustment: Divide by that month factor and round to 1 decimal. Adjustment covers Business Activity, New Orders, Prices and Employment only. For example, 52.25 divided by about 1.045 gives 50.0.
4. Composite Services PMI: Average the 4 indexes by adding and dividing by 4. Deliveries enters unadjusted, counting slower shares plus 0.5 times same shares.
5. Other sub-indexes: For indexes outside the composite, use higher plus 0.5 times same to 1 decimal with no seasonal correction. Rounding can make manual sums differ slightly from published values.