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


January 2006 Non-Manufacturing ISM Report On Business®
Business Activity at 56.8%
New Orders Index at 56%;
Employment Index at 51.1%

(Tempe, Arizona) — Business activity in the non-manufacturing sector increased in January 2006, say the nation''s purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.
The report was issued today by Ralph G. Kauffman, Ph.D., C.P.M., chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee and coordinator of the Supply Chain Management Program, University of Houston-Downtown. """"Non-manufacturing business activity increased for the 34th consecutive month in January,"""" Kauffman said. He added, """"Business Activity and New Orders increased at slower rates in January than in December. Imports, Employment and New Export Orders also increased at slower rates while Prices increased at the same rate as in December. Eight of 16 non-manufacturing industry sectors report increased activity in January compared to 11 that reported increased activity in December. While in almost all indexes growth declined in January, they are still above the value of """"50"""" indicating that growth continues, but at slower rates of growth. Members'' comments in January continue to be generally positive concerning current business conditions. Several members mention concerns about the continued high level of energy prices and rising interest rates. The Prices Index held steady this month, but remains in a historically high range for the ISM Non-Manufacturing Business Survey. The overall indication in January is continued economic growth in the non-manufacturing sector, but at slower rates of increase.""""

TOP PERFORMING INDUSTRIES

The eight industries reporting growth in January — listed in order — are: Insurance; Business Services; Utilities; Mining; Transportation; Other Services*; Health Services; and Finance & Banking. The three industries reporting activity the same as last month are: Public Administration; Communication; and Entertainment. The five industries reporting decreased activity from December to January are: Agriculture; Wholesale Trade; Real Estate; Retail Trade; and Construction.

WHAT RESPONDENTS ARE SAYING ...

""""We experienced a season [al] trend slowdown in our level of business activity and in our level of professionals working at a client site."""" (Business Services)
""""Interest rate increases taking effect together with higher energy costs beginning to materially impact consumer spending."""" (Finance & Banking)
""""A good month overall. Outpatient services and activity continue to perform over budget, but inpatient activity continues to perform under budget."""" (Health Services)
""""The oil industry continues to have a profound impact on all commodities either in production or the delivery process. Fluctuations will continue until oil stabilizes."""" (Public Administration)
""""Economy — business is good, consumer trading down."""" (Retail Trade)
""""Contractor availability for maintenance and construction projects continues to decline due to regional business activity. A high percentage decline opportunities to bid."""" (Utilities)

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

Commodities Up in Price

Airfares (10); Aluminum (2); Asphalt/Asphalt Products (3); Batteries — Automotive and Other; Beef* (3); Cement; Concrete (2); Copper (29); Copper Products (various) (3); Corn (2); Corrugated (3); #1 Diesel Fuel (11); #2 Diesel Fuel (13); Electricity (2); Freight Charges (7); Fuel (26); Gasoline* (26); Lumber -Pine, Spruce and Treated; Metals; Natural Gas (8); Office Supplies; Paper (24); Petroleum; Petroleum Goods/Products; Plastics/Plastic Products (7); Plastic Bags (2); Postal Rates; Rental Vehicles; Roofing Materials*; Soybean Meal (2); Steel/Steel Products (2); Tomatoes (2); and Unleaded Gasoline.
Commodities Down in Price
Beef*; Gasoline*; Memory/Memory Products; Poultry; Roofing Materials*; and Seafood/Shrimp.

Commodities in Short Supply
Drywall; Roofing Materials; and Stretch Film.
*Reported as both up and down in price.

Note: The number of consecutive months the commodity is listed is indicated after each item.

JANUARY 2006 NON-MANUFACTURING INDEX SUMMARIES

Business Activity

ISM''s Non-Manufacturing Business Activity Index in January decreased to 56.8 percent from December''s seasonally adjusted 61 percent, indicating a slower rate of growth of activity in January. This month, eight sectors report increased business activity, five are reporting decreased activity, and three indicate unchanged activity compared to December.
The industries reporting the highest rates of growth of business activity in January are: Insurance; Business Services; Utilities; Mining; and Transportation. The industries reporting contraction of business activity in January are: Agriculture; Wholesale Trade; Real Estate; Retail Trade; and Construction.

New Orders

ISM''s Non-Manufacturing New Orders Index decreased to 56 percent in January from the seasonally adjusted 62.2 percent registered in December. This indicates continued expansion of new orders at a slower rate of growth than in December. Comments from members include: """"The backload of work and new jobs won give us a stronger outlook for fiscal year 2006""""; """"Growth in business""""; """"Increased proposal and prospect activity""""; and """"More new restaurant openings.""""
Industries reporting the highest rates of growth of new orders in January are: Entertainment; Mining; Insurance; Transportation; and Health Services. The industries reporting contraction of new orders in January are: Agriculture; Real Estate; Retail Trade; and Wholesale Trade.

Employment

Employment activity in the non-manufacturing sector increased at a slower rate in January compared to December. This was the 18th consecutive monthly increase in non-manufacturing employment. ISM''s Non-Manufacturing Employment Index for January is 51.1 percent, a drop of 5.8 percentage points from December''s seasonally adjusted 56.9 percent. Six industries are reporting increased employment, eight report decreases, and two indicate employment is unchanged from December. Comments from respondents include: """"Reduction due to reduced business""""; """"Increased work levels""""; """"Added staffing at new stores""""; and """"Hiring for construction projects.""""
The industries reporting the highest rates of growth in employment in January are: Mining; Insurance; Transportation; Public Administration; and Other Services*. Industries reporting the highest rates of reduction in employment in January are: Entertainment; Agriculture; Wholesale Trade; Finance & Banking; and Construction.