The Institute for Supply Management reported last Friday that its purchasing managers index (PMI) for the month of July showed a stronger-then-expected gain in its manufacturing index. The question is if the ISM can show the same sort of gain for its non-manufacturing and services index on Tuesday.

The manufacturing index rose 1.8 points to 57.1% in July from 55.3% in June. Bloomberg expected for the index to come in only marginally higher at a reading of 56%. Most importantly this marked the single best nationwide manufacturing reading as far back as the April of 2011.

So, can the services and non-manufacturing keep up with expectations as well? The Bloomberg consensus for July is 56.5, which falls squarely in its consensus range of 55.0 to 57.5. Dow Jones has a consensus estimate of 56.1. The index was previously at 56.0 in June.

The composite index from the ISM non-manufacturing survey in June showed very solid growth, at 56.0 in June versus a reading of 56.3 in May. Both of these readings were among the very best of the recovery and compared with a winter low of 51.6 in February. Other key data was follows:

• New orders came in at 61.2 for a 0.7 gain, their strongest growth in 3 and a half years.
• Backlog orders and export orders both grew as well.
• The ISM in manufacturing experienced a rise in new orders totaling at 63.4 in July. This is a large step up from 58.9 reported in June, making this the best reading for all of 2014 to-date.
• Production rose by 1.2 points to 61.2 in July.
• July also marked the largest gain in employment growth. This sub-sector of the PMI report was up 5.4 points from June with a new reading of 58.2. That is the strongest reading in roughly three years.

The non-manufacturing ISM index is a broad survey of over 375 firms from numerous sectors, and the index covers services, construction, mining, agriculture, forestry, and fishing and hunting. You have heard for years and years that the United States has moved into a post-manufacturing economy. That being said, some market watchers are likely more focused on the ISM’s non-manufacturing report each month than they are on the manufacturing reports.

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