by Calculated Risk on 5/05/2020 10:18:00 AM

The April ISM Non-manufacturing index was at 41.8%, down from 52.5% in March. The employment index decreased to 30.0%, from 47.0%. Note: Above 50 indicates expansion, below 50 contraction.

From the Institute for Supply Management: April 2020 Non-Manufacturing ISM Report On Business®

conomic activity in the non-manufacturing sector contracted in April for the first time since December 2009, ending a 122-month period of growth, say the nation's purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.

The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Non-Manufacturing Business Survey Committee: "The NMI® registered 41.8 percent, 10.7 percentage points lower than the March reading of 52.5 percent. This reading represents contraction in the non-manufacturing sector and is the NMI®'s lowest since March 2009 (40.1 percent). The Business Activity Index fell 22 percentage points from March's figure, registering 26 percent — the lowest reading for that index since the debut of the Non-Manufacturing ISM® Report On Business® in 1997. The New Orders Index registered 32.9 percent, 20 percentage points below the reading of 52.9 percent in March. The Employment Index decreased to 30 percent, 17 percentage points below the March reading of 47 percent.

"The Supplier Deliveries Index registered an all-time high of 78.3 percent, up 16.2 percentage points from the March reading of 62.1 percent, which limited the decrease in the composite NMI®. The Supplier Deliveries Index is one of four equally weighted subindexes that directly factor into the NMI®, along with Business Activity, New Orders and Employment. Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases. However, the combined 25.9-percentage point increase in March and April was primarily a product of supply problems related to the coronavirus (COVID-19) pandemic.
emphasis added

The headline index understated the weakness in the survey. The Supplier Deliveries index boosted the composite NMI, while other indexes hit record lows.