Weekly Market Insight • ISM Indexes; Values > 50 = Expansion • 1 2/05/11

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ISM Indexes
Values > 50 = Expansion
December 05, 2011
Sources: Institute for Supply Management, Grubb & Ellis
The Institute for Supply Management’s indexes for the manufacturing and nonmanufacturing (service) sectors of the economy registered 52.7 and 52.0, respectively, last month, pointing to continued, modest growth. The indexes, which are based on monthly surveys of purchasing managers across a range of businesses, include several sub-indexes such as new orders and employment, among others. The new orders component, which correlates with future production, increased by over four points to 56.7 for manufacturers and by less than one point to 53.0 for service firms, pointing to slightly more economic momentum in the months ahead. The momentum might not carry over into hiring, however, as the employment component declined by 1.7 points to 51.8 for manufacturers and by 4.4 points to 48.9 for service firms. Retailers posted the largest employment score among service firms last month, a harbinger of robust sales on Black Friday and Cyber Monday. Taken together, the two surveys paint a picture of an economy that is expanding sporadically from month to month and industry to industry. For commercial real estate, the reports suggest modest tightening in the months ahead with the tenants’ market, which has been in place since 2008, loosening at a very gradual pace.
Robert Bach, Senior Vice President, Chief Economist, has 30 years of professional experience in real estate market research, consulting and city planning. His commentary on the real estate markets is provided here on a weekly basis.

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Robert Bach
Senior Vice President, Chief Economist

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About CRE Northwest

Specialist in office & investment real estate in Seattle & the Eastside
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