ISM non-manufacturing composite rose to 58.6 in May, up from 56.8 and beat expectation of 57.4. Business activity index rose 2.2 to 61.3. New orders rose 0.5 to 60.5. Employment index rose 0.5 to 54.1.

Dollar responses positive to the upside surprise. In particular USD/CAD finally takes out 1.3046 resistance to resume recent rally.

ISM noted in the release that “the majority of respondents are optimistic about business conditions and the overall economy.” But “there continue to be concerns about the uncertainty surrounding tariffs, trade agreements and the impact on cost of goods sold.”

- advertisement -

Some quotes from respondents:

“Material prices have been difficult to predict this year, and suppliers have struggled to hold prices for any extended period on quotes, specifically on lumber and lumber-related products. The instability has proven frustrating, but a larger problem is that we are starting to see longer lead times in many of the same areas that could start impacting timelines if they continue to get worse as we get into the main building season.” (Construction)

“The trade discussions with NAFTA, Korea and the European Union will have critical impacts on our spend relating to steel products. Also, the potential of the U.S. pulling out of the Iran nuclear deal could push crude prices higher.” (Mining)

“Oil price stabilization in the (US) $60 to $70 per barrel [is] having a positive impact on hiring, both contract labor and direct employees, in the oil and gas industry and supporting industries.” (Professional, Scientific & Technical Services)

Full release here.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.