The following is the un-edited press release from the Institute for Supply Management.


TOP PERFORMING INDUSTRIES

The 10 industries reporting growth in March — listed in order — are: Utilities; Educational Services; Other Services; Retail Trade; Finance & Insurance; Transportation & Warehousing; Health Care & Social Assistance; Professional, Scientific & Technical Services; Public Administration; and Construction. The four industries reporting decreased activity from February to March are: Management of Companies & Support Services; Accommodation & Food Services; Information; and Arts, Entertainment & Recreation.

WHAT RESPONDENTS ARE SAYING ...

""""Overall core business activity is slightly slower."""" (Finance & Insurance)
""""Constant increases in fuel costs seem to be causing an economic downturn. Outlook remains cautiously optimistic."""" (Professional, Scientific & Technical Services)
""""Business activity seems to have slowed with some brightness on the horizon."""" (Wholesale Trade)
""""Market remains stable."""" (Information)
""""Business is OK but not great. We will not get the price in the market. Making our year depends upon cost control."""" (Agriculture, Forestry, Fishing & Hunting)

MARCH 2007 NON-MANUFACTURING INDEX SUMMARIES

Business Activity

ISM''s Non-Manufacturing Business Activity Index in March registered 52.4% compared to the seasonally adjusted 54.3 % registered in February, indicating a slower rate of growth in business activity in March. The implication is that non-manufacturing business activity is continuing to increase for the 48th consecutive month. Ten industries reported increased business activity, and four reported decreased activity for the month of March.

The industries reporting growth of business activity in March are: Utilities; Educational Services; Other Services; Retail Trade; Finance & Insurance; Transportation & Warehousing; Health Care & Social Assistance; Professional, Scientific & Technical Services; Public Administration; and Construction. The four industries reporting contraction of business activity in March are: Management of Companies & Support Services; Accommodation & Food Services; Information; and Arts, Entertainment & Recreation.

New Orders

ISM''s Non-Manufacturing New Orders Index decreased to 53.8% in March from the seasonally adjusted 54.8% registered in February. This indicates continued expansion of new orders, but at a slower rate than in February. Comments from members include: """"February''s business activity was lower than January and December. We are not sure if this is a seasonal trend or if there is a slowdown in the temporary labor market""""; and """"General slowdown.""""

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

Employment

Employment activity in the non-manufacturing sector increased at a slower rate in March compared to February. This was the 32nd consecutive monthly increase in non-manufacturing employment. ISM''s Non-Manufacturing Employment Index for March is 50.8%, a 1.4 percentage point decrease from the seasonally adjusted 52.2% reported in February. Eight industries reported increased employment in March, six reported a decrease, and three indicated employment is unchanged from February. Comments from respondents include: """"Negative outlook on the economy""""; """"Open positions filled""""; and """"Last hiring spree before economic slowdown.""""

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

Supplier Deliveries

In March, the delivery performance of suppliers to non-manufacturing organizations registered 50%, 2.5 percentage points lower than in February. A reading above 50 % indicates slower deliveries. Comments from purchasing and supply executives concerning supplier deliveries in March include: """"Trend is toward improving; however, commodity shortages still abound in distribution transformer segment""""; and """"Winter weather problems.""""

The industries reporting slowing in supplier deliveries in March are: Transportation & Warehousing; Real Estate, Rental & Leasing; Utilities; Retail Trade; Health Care & Social Assistance; Wholesale Trade; and Professional, Scientific & Technical Services. The seven industries reporting faster supplier deliveries in March are: Agriculture, Forestry, Fishing & Hunting; Management of Companies & Support Services; Finance & Insurance; Construction; Information; Educational Services; and Public Administration.
Inventories

ISM''s Non-Manufacturing Inventories Index registered 52 % in March, an increase of 1.5%age points compared to February. Inventories are expanding for the second consecutive month after one month of contraction. Of the total respondents in March, 33% indicated they do not have inventories or do not measure them. Comments from members include: """"Slower business activity""""; """"Area of concern to cut levels""""; and """"Sales are down, high inventory.""""