ISM Non-Manufacturing New Orders

The New Orders Index measures the breadth of incoming demand compared with the previous month, not its dollar value. It is one of four equal parts of the monthly Services PMI (Purchasing Managers' Index), published by the Institute for Supply Management (ISM). The services report covers 18 US services industries and excludes manufacturing. It began in 1997 as the Non-Manufacturing NMI (Non-Manufacturing Index).

ISM sends the survey early each month. Respondents report only on the current month versus the previous month, and most replies arrive late in the month. The full report appears after 10:00 a.m. Eastern Time on the third business day of each month. In January it appears on the fourth business day, unless the New York Stock Exchange is closed.

Each release covers all 10 indexes, ranked industry lists, respondent comments, commodities up and down in price, and 12-month history tables. A GDP (gross domestic product) note maps the reading to growth. Raw answers are never revised, but seasonal factors are reviewed each year, so adjusted values can shift. Markets watch the level against 50%, the monthly move, the streak of months, the 12-month average, and the GDP link.

New Orders is one of four equal parts of Services PMI, so the other three components shape the headline reading.

• Business Activity, 25%: pace of services business activity, the production-like demand-activity gauge.
• New Orders, 25%: inflow of new orders, the forward-looking demand signal tracked on this page.
• Employment, 25%: services-sector employment conditions.
• Supplier Deliveries, 25%: speed of supplier deliveries, inversed and not seasonally adjusted, with above 50% meaning slower and below 50% meaning faster.
• Other indexes: Prices, Inventories, Backlog of Orders, New Export Orders, Imports, and Inventory Sentiment. These indexes appear in the report but sit outside the composite.

The April 2020 report, released May 5, 2020 during the COVID-19 demand collapse, put the NMI (Non-Manufacturing Index) at 41.8%, down 10.7 points from 52.5%. New Orders fell to 32.9%, down 20.0 points from 52.9%, ending 128 months of expansion. Business Activity hit 26.0% and Employment hit 30.0%, yet Supplier Deliveries surged to 78.3%, limiting the fall in the composite. The reading mapped to a 2.3% annualized drop in real GDP, with only 2 of 18 industries growing.

1. Unadjusted diffusion: Add the share reporting higher orders plus half the share reporting no change, kept to two decimals.
2. Seasonal adjustment: Divide the unadjusted index by its monthly seasonal factor and round to one decimal. New Orders is seasonally adjusted.
3. Composite link and example: Services PMI averages the four component indexes divided by 4. Supplier Deliveries enters unadjusted. For example, invented shares of 30% higher, 50% unchanged, and 20% lower give 55.00, which divided by an illustrative 0.916 factor rounds to 60.0. The other six indexes use the same diffusion sum rounded to one decimal, and rounding gaps can shift published values.