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


(Tempe, Arizona) — Business activity in the non-manufacturing sector increased at a slower rate in December than in November, 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. """"Non-manufacturing business activity increased for the 57th consecutive month in December,"""" Nieves said. He added, """"The Business Activity Index decreased 0.2 percentage point to 53.9 percent for the month of December. The New Orders Index increased to 53.5 percent and the Employment Index increased to 52.1 percent. The Prices Index decreased to 72.7 percent in December. Five non-manufacturing industries reported increased activity in December. Members'' comments in December vary by industry segment and remain concerned about the economy. The overall indication in December is continued economic growth in the non-manufacturing sector, but at a slightly slower pace than in November.""""

TOP PERFORMING INDUSTRIES

The five industries reporting growth in December — listed in order — are: Retail Trade; Information; Professional, Scientific & Technical Services; Construction; and Health Care & Social Assistance. The eight industries reporting decreased activity from November to December are: Management of Companies & Support Services; Other Services*; Accommodation & Food Services; Real Estate, Rental & Leasing; Finance & Insurance; Wholesale Trade; Educational Services; and Arts, Entertainment & Recreation.
WHAT RESPONDENTS ARE SAYING ...
""""Market pressures in the fourth quarter continue to slow business and limit growth going into 2008 in the financial services sector."""" (Finance & Insurance)
""""Higher energy costs affecting all facets of our business."""" (Agriculture, Forestry, Fishing & Hunting)
""""Anticipating modest growth in revenues in first two quarters of 2008 if interest rates do not rise and inflation remains in check."""" (Professional, Scientific & Technical Services)
""""There continues to be concern regarding energy, commodity, credit, transportation, etc. These issues are consistent topics of conversation."""" (Retail Trade)
""""General market conditions have not changed since last month. Overall, the supply and demand is still out of balance with pricing being stable."""" (Construction)

COMMODITIES REPORTED UP / DOWN IN PRICE, and IN SHORT SUPPLY
Commodities Up in Price

Carbon Steel Pipe; Copier Paper; Corn; Diesel Fuel (3); #2 Diesel Fuel (3); Electric; Freight; Freight Fuel Surcharges (2); Fuel (11); Gasoline (4); #2 Heating Fuel (3); Paper (2); Plastic Bags; Poly Bags; Polyethylene Films; Stainless Steel; Stretch Film; Travel Costs; and Wheat.
Commodities Down in Price

Lumber is the only commodity reported down in price.
Commodities in Short Supply

Coated Paper; Helium; and Labor — Skilled, Temporary.


DECEMBER 2007 NON-MANUFACTURING INDEX SUMMARIES

Business Activity

ISM''s Non-Manufacturing Business Activity Index in December registered 53.9 percent, indicating a slightly slower rate of growth in business activity compared to November. The implication is that non-manufacturing business activity is continuing to increase for the 57th consecutive month. Five industries reported increased business activity, and eight industries reported decreased activity for the month of December.

The industries reporting growth of business activity in December are: Retail Trade; Information; Professional, Scientific & Technical Services; Construction; and Health Care & Social Assistance. The eight industries reporting decreased activity from November to December are: Management of Companies & Support Services; Other Services*; Accommodation & Food Services; Real Estate, Rental & Leasing; Finance & Insurance; Wholesale Trade; Educational Services; and Arts, Entertainment & Recreation.

New Orders

ISM''s Non-Manufacturing New Orders Index increased to 53.5 percent in December from the 51.1 percent registered in November. This indicates continued expansion of new orders at a faster rate than in November. Comments from members include: """"Additional orders/contracts""""; """"New business and more from existing customers""""; and """"Increase in marketing and new projects funded by companies.""""

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

Employment

Employment activity in the non-manufacturing sector increased in December, at a faster rate when compared to November. ISM''s Non-Manufacturing Employment Index for December is 52.1 percent, a 1.3 percentage point increase from the 50.8 percent reported in November. Six industries reported increased employment, seven reported a decrease, and four indicated employment is unchanged from November. Comments from respondents include: """"Increased scope of operations""""; """"New job awards""""; and """"Additional staff for new store.""""