New Orders

ISM''s Non-Manufacturing New Orders Index contracted in June after three consecutive months of growth. The index decreased 5 percentage points to 48.6 percent from the 53.6 percent registered in May. Comments from respondents include: """"Customer cutbacks""""; """"Fewer leads or prospects""""; and """"General slowdown being observed.""""

Industries reporting growth of new orders in June are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Construction; Mining; Transportation & Warehousing; Utilities; Management of Companies & Support Services; Educational Services; Finance & Insurance; and Information. The industries reporting contraction of new orders in June are: Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Health Care & Social Assistance; Retail Trade; Wholesale Trade; and Public Administration.

Employment

Employment activity in the non-manufacturing sector contracted in June for the fifth time in the last six months. ISM''s Non-Manufacturing Employment Index for June registered 43.8 percent. This reflects a decrease of 4.9 percentage points when compared to the 48.7 percent registered in May. Six industries reported increased employment, eight industries reported a decrease, and four industries indicated employment is unchanged from May. Comments from respondents include: """"Incremental downsizing""""; """"Some positions eliminated""""; and """"We still have a significant number of open positions.""""

The industries reporting growth in employment in June are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Information; Utilities; Professional, Scientific & Technical Services; and Accommodation & Food Services. The industries reporting a reduction in employment in June are: Other Services*; Finance & Insurance; Transportation & Warehousing; Health Care & Social Assistance; Management of Companies & Support Services; Public Administration; Educational Services; and Wholesale Trade.

Supplier Deliveries

Supplier deliveries were slower in June, with the index registering 50.5 percent. A reading above 50 percent indicates slower deliveries.

The industries reporting slowing in supplier deliveries in June are: Educational Services; Health Care & Social Assistance; Retail Trade; and Wholesale Trade. The industries reporting faster supplier deliveries in June are: Agriculture, Forestry, Fishing & Hunting; Information; Management of Companies & Support Services; Transportation & Warehousing; Finance & Insurance; and Public Administration.

Inventories

ISM''s Non-Manufacturing Inventories Index registered 53 percent in June, indicating that inventory levels grew for the second consecutive month in June after contracting in April. Of the total respondents in June, 28 percent indicated they do not have inventories or do not measure them. Comments from members include: """"Adding critical spare parts"""" and """"Stock up against steel increases.""""

The industries reporting increases in inventories in June are: Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Mining; Other Services*; Retail Trade; Professional, Scientific & Technical Services; Finance & Insurance; Information; and Health Care & Social Assistance. The industries reporting decreases in inventories in June are: Agriculture, Forestry, Fishing & Hunting; Accommodation & Food Services; Wholesale Trade; Management of Companies & Support Services; and Public Administration.

Prices

Prices paid by non-manufacturing organizations for purchased materials and services increased in June for the 61st consecutive month. ISM''s Non-Manufacturing Prices Index for June registered 84.5 percent, 7.5 percentage points higher than May''s index of 77 percent. June''s reading is the highest reading for the Prices Index since the Non-Manufacturing report began. In June, the percentage of respondents reporting higher prices is 72 percent, the percentage indicating no change in prices paid is 26 percent, and 2 percent of the respondents reported lower prices.

In June, 17 industries reported an increase in prices paid in the following order: Mining; Construction; Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Finance & Insurance; Educational Services; Management of Companies & Support Services; Accommodation & Food Services; Professional, Scientific & Technical Services; Other Services*; Wholesale Trade; Public Administration; Utilities; Retail Trade; Transportation & Warehousing; Information; and Health Care & Social Assistance. The one industry reporting no change is Agriculture, Forestry, Fishing & Hunting. No industry reported a decrease in prices paid.

Backlog of Orders

ISM''s Non-Manufacturing Backlog of Orders Index contracted in June. The index registered 49 percent, the same as reported in May. Of the total respondents in June, 46 percent indicated they do not measure backlog of orders.

The industries reporting an increase in order backlogs in June are: Construction; Information; Accommodation & Food Services; and Wholesale Trade. The industries reporting lower backlog of orders in June are: Agriculture, Forestry, Fishing & Hunting; Utilities; Other Services; Professional, Scientific & Technical Services; and Public Administration.

New Export Orders

Orders and requests for services and other non-manufacturing activities to be provided outside of the United States by domestically based personnel indicated growth for the month of June. The New Export Orders Index for June registered 52 percent, compared to May''s index of 54 percent. Of the total respondents in June, 68 percent indicated they either do not perform, or do not separately measure, orders for work outside of the United States.