June 4, 2003 -- Tempe, Arizona -- Business activity in the non-manufacturing sector increased in May 2003, 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 purchasing and supply management program, University of Houston-Downtown. "Non-manufacturing business activity increased for the second consecutive month in May," Kauffman said. He added, "Also in May, new orders, order backlogs, and imports increased." Purchasing and supply executives in May report the best monthly business activity since the January 2003 reading of 54.5 percent. In the non-manufacturing sector, 12 industry groups grew in May, while three groups contracted and two reported no change from April. Increased business activity in May was reported by 31 percent of members, compared to April's 28 percent. Reduced activity was reported by 18 percent of members compared to 19 percent in April. In May, the remaining 51 percent of members indicated no change in business activity compared to 53 percent in April. The Backlog of Orders Index rose by 5 percentage points to 51 percent, indicating growth in order backlogs for the first time since December 2002. The May New Orders Index increased from 50.6 percent in April to 54.7 percent in May. This reflects a faster rate of increase of new orders in May compared to April. Members reported that the prices they pay decreased in May after 14 consecutive months of increases. May's Prices Index is 49.6 percent, down from 56.7 percent in April. This month, nine industry groups reported paying higher prices compared to April, three reported paying the same, and five industry groups reported paying lower prices in May. Prices in general seem to be moderating as this report's list of commodities reported up in price is shorter than it was in April. Members' general comments on business in May continue to be mixed but contain tinges of optimism. Particular comments include: "Nationally, in manufacturing, things seem to be picking up. Manufacturers are our customers and we're seeing their willingness to spend coming back"; "Local and national business conditions are improving. New leadership improving local markets"; "Funding outlook continues to be somewhat uncertain with state budget problems"; and "Purchases ramp up in May in anticipation of increased retail activity in the summer." === Free WTT Analysis: Below is a quick take on this news from Dr. Joe Webb. Premium Access Members can view more analysis in his weekly column on Friday, appropriately called “Fridays with Dr. Joe”. "Can we stand more good economic news? We're starting to turn around in the general economy. It will take a while to filter down to print budgets, but there is a discernible change in the economic indicators. What we don't have is a sense of the speed of recovery. While a boom is not on the horizon, we're not scraping along the bottom any more.”