The following is an unedited transcript of the news release from the Institute for Supply Management.


(Tempe, Arizona) — Economic activity in the non-manufacturing sector contracted in March, 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, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee; and senior vice president — supply management for Hilton Hotels Corporation. """"The NMI (Non-Manufacturing Index) increased 0.3 percentage point to 49.6 percent, indicating contraction for the third consecutive month within the non-manufacturing sector for March 2008. Non-manufacturing business activity increased for the second consecutive month. The New Orders Index increased 0.6 percentage point to 50.2 percent, and the Employment Index contracted for the third consecutive month, remaining at 46.9 percent. The Prices Index increased to 70.8 percent in March, indicating a faster rate in price increases than in February. According to the NMI, 11 non-manufacturing industries reported growth in March. Members'' comments in March are mixed and reflect concern about rising fuel and energy costs and the impact they are having on commodity prices.""""

INDUSTRY PERFORMANCE (Based on the NMI)

The 11 industries reporting growth in March based on the new NMI composite index — listed in order — are: Real Estate, Rental & Leasing; Mining; Agriculture, Forestry, Fishing & Hunting; Construction; Information; Other Services*; Utilities; Retail Trade; Accommodation & Food Services; Health Care & Social Assistance; and Public Administration. The six industries reporting contraction in March are: Transportation & Warehousing; Wholesale Trade; Educational Services; Finance & Insurance; Management of Companies & Support Services; and Professional, Scientific & Technical Services.

WHAT RESPONDENTS ARE SAYING ...

""""Business has increased due in part to us reducing unit prices on all products. Sales traffic has increased and foreign buyers have made up the majority of the increased traffic."""" (Construction)
""""Continued stress in the financial markets across a broad base of factors continues to have impacts on overall business activity."""" (Finance & Insurance)
""""Outrageous, speculative oil prices are driving up petroleum-based products as well as delivery costs."""" (Professional, Scientific & Technical Services)
""""Although business levels are higher this month, the current trend is not as active for spending."""" (Accommodation & Food Services)
""""Activity levels ahead of plan, but reimbursement and overall revenues only tracking to plan. Continued concerns regarding erosion of returns on investment which are used to fund capital projects, pension plans, etc."""" (Health Care & Social Assistance)


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

Commodities Up in Price

A/C Parts; Air Freight; Airline Tickets; All Fuel; All Oil Based Products; Aluminum; Aluminum Products; Auto Fuel; Automotive; Bakery Items; Beef; Bread; Carbon Steel Pipe; Construction Labor; Copier Paper (2); Copper Products; Copper Wire; Corrugated (2); Cut Paper; Diesel Fuel (6); #1 Diesel Fuel; #2 Diesel Fuel (6); Eggs; Energy; Freight Charges; Fuel (14); Fuel Products; Fuel Surcharges (3); Gasoline* (7); #2 Heating Fuel; Lighting Supplies; Nickel Products; Office Paper; Office Supplies (2); Oil; Paper (5); Paper Products; Pasta; Petroleum; Petroleum Products; Pipe; Plastic Bags; Plastic Products (2); Plumbing Products; Resin; Shipping Costs; Silver; Stainless Steel Products (2); Stainless Steel Sheet; Steel; Steel Plate; Steel Products (3); Steel Sheet; Textile Products; Toilet Paper; Toner; Trash Can Liners; and Wood Products.

Commodities Down in Price

Gasoline is the only commodity reported down in price.

Commodities in Short Supply

Coated Ground Wood (2) and Steel.

NMI (Non-Manufacturing Index)

Beginning with the January 2008 Non-Manufacturing Report On Business®, a composite index is now calculated as an indicator of the overall economic condition for the non-manufacturing sector. The NMI is a composite index based on the diffusion indexes for four of the indicators with equal weights: Business Activity (seasonally adjusted), New Orders (seasonally adjusted), Employment (seasonally adjusted) and Supplier Deliveries. March''s NMI at 49.6 percent indicates a contraction in the non-manufacturing sector. A reading above 50 percent indicates the non-manufacturing sector economy is generally expanding; below 50 percent indicates the non-manufacturing sector is generally contracting.

The industries reporting growth in March are: Real Estate, Rental & Leasing; Mining; Agriculture, Forestry, Fishing & Hunting; Construction; Information; Other Services*; Utilities; Retail Trade; Accommodation & Food Services; Health Care & Social Assistance; and Public Administration. The industries reporting contraction in March are: Transportation & Warehousing; Wholesale Trade; Educational Services; Finance & Insurance; Management of Companies & Support Services; and Professional, Scientific & Technical Services.

Business Activity