Commentary March 24, 2020 / 03:44 pm UTC

Preview: Due April 3 - U.S. March ISM Non-Manufacturing Index

By David Sloan

We expect March’s ISM non-manufacturing index to see a sharp plunge to 44.5 following a strong 57.3 result in February, as social distancing has hit the service industries hard. This would be the weakest print since May 2009.

The scale of our forecasted decline would be similar to that seen in the Markit Services PMI, though the level on the Markit PMI result will be weaker than the ISM data, which is usually the case. The scale of social distancing varies by region, as exhibited in a more resilient Richmond Fed services survey compared to the collapse in the Philadelphia Fed print, but even the former slowed sharply from February.

We expect to see a very weak 40.0 index for both new orders and production, as well as a weak employment number, albeit less so, at 45.0. However, delivery times may be inflated, with a modest rise to 53.0 from 52.4. We expect prices paid, which is not a contributor to the composite, to slip to 45.0 from 50.8 due to the plunge in oil prices.

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I, David Sloan, the lead analyst certify that the views expressed herein are mine and are clear, fair and not misleading at the time of publication. They have not been influenced by any relationship, either a personal relationship of mine or a relationship of the firm, to any entity described or referred to herein nor to any client of Continuum Economics nor has any inducement been received in relation to those views. I further certify that in the preparation and publication of this report I have at all times followed all relevant Continuum Economics compliance protocols including those reasonably seeking to prevent the receipt or misuse of material non-public information.