TOP PERFORMING INDUSTRIES

The nine industries reporting growth in October - listed in order - are: Utilities; Information; Retail Trade; Finance & Insurance; Public Administration; Health Care & Social Assistance; Management of Companies & Support Services; Educational Services; and Wholesale Trade. The three industries reporting activity the same as last month are: Agriculture, Forestry, Fishing & Hunting; Mining; and Transportation & Warehousing. The six industries reporting decreased activity from September to October are: Other Services*; Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Construction; Accommodation & Food Services; and Professional, Scientific & Technical Services.

WHAT RESPONDENTS ARE SAYING ...

""Improved outlook and confidence in the economy."" (Educational Services)
'Business continues to be strong.'(Management of Companies & Support Services)
'General market conditions are still trending down. Order cancellation rates are higher month over month. New orders are stronger, but are still lower than expected.' (Construction) 'Total lending and lending income increased, savings decreased.' (Finance & Insurance)
'Things are improving from the standpoint of activity. There remains a constraint of resources such as labor and transportation.' (Retail Trade)
'Slowing demand.' (Wholesale Trade)

COMMODITIES REPORTED UP / DOWN IN PRICE, and IN SHORT SUPPLY

Commodities Up in Price

Alloy Materials/Valves; Cheese; Construction; Corn; 1 Diesel Fuel; Fuel; Healthcare; Hotel Costs (5); Office Products & Supplies (2); Paper (33); Paper Products (9); Plastics; Rental Vehicles; Roofing Shingles; Salmon; Soy Hulls; Soy Oil; Soybean Meal; Stainless Steel (2); Steel Products; and Truck Chassis.

Commodities Down in Price

Computers & Computer Supplies; Diesel Fuel (2); 2 Diesel Fuel (2); Fuel (2); Gasoline (2); Lumber — Pine, Spruce and Treated (5); Natural Gas (2); Oil; Oil-Based Products; and Petroleum.

Commodities in Short Supply

Cement/Concrete (2); Medical Supplies; Nickel Alloys; Stainless Products; Steel; Tires; Transformers (3); and Vaccines (2).

OCTOBER 2006 NON-MANUFACTURING INDEX SUMMARIES

Business Activity

ISM''s Non-Manufacturing Business Activity Index in October registered 57.1% compared to the 52.9% registered in September, indicating a faster rate of growth in business activity in October. The implication is that non-manufacturing business activity is continuing to increase for the 43rd consecutive month, at a faster rate. This month, nine sectors reported increased business activity, six reported decreased activity, and three indicated unchanged activity compared to September.

The industries reporting growth of business activity in October are: Utilities; Information; Retail Trade; Finance & Insurance; Public Administration; Health Care & Social Assistance; Management of Companies & Support Services; Educational Services; and Wholesale Trade. The six industries reporting contraction of business activity in October are: Other Services*; Real Estate, Rental & Leasing; Arts, Entertainment & Recreation; Construction; Accommodation & Food Services; and Professional, Scientific & Technical Services.

New Orders

ISM''s Non-Manufacturing New Orders Index decreased to 56.5% in October from the 57.2% registered in September. This indicates continued expansion of new orders, but at a slower rate than in September. Comments from members include: """"""""""""""""Moving towards a slower quarter in the business cycle"""""""""""""""" and """"""""""""""""Slowing demand.""""""""""""""""

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

Employment

Employment activity in the non-manufacturing sector increased at a slower rate in October compared to September. This was the 27th consecutive monthly increase in non-manufacturing employment. ISM''s Non-Manufacturing Employment Index for October is 51%, a decrease of 2.6% age points from the 53.6% reported in September. Eight industries reported increased employment, eight reported a decrease, and two indicated employment is unchanged from September. Comments from respondents include: """"""""""""""""Hiring freeze and some layoffs"""""""""""""""" and """"""""""""""""Recent downsizing of 5% of the workforce.""""""""""""""""