The ISM NMI (Non-Manufacturing Index) came in at 53.8, which is down from 55.4 in May. The Business Activity Index was 58.1, down from 61.1 in May, and New Orders was 54.4, down from 57.1 in May. The employment index came in at 49.7, slightly below the growth threshold of 50. Here are some bullet points about the numbers:

• There might be some negative reaction in financial markets to these numbers, since they are down across the board from May.
• All of the number aside from employment are well above 50, meaning that sentiment is positive and the market is expanding.
• The bottom line is that these numbers continue to show that the Services sector is growing, as it has been for the past 6 months.
• Ariba forecasted a slight dip in these numbers at AribaLive (in my presentation), but we also indicated that it was not cause for overall concern.
• The only number that concerns us is the employment index, which is a further indications that labor markets are still holding back the broader recovery.

We remain in recovery mode, but the recovery will be slow with a few bumps in the road. For buyers, this means that they remain in control in nearly all Indirect/Services categories - we still see plenty of opportunity for driving savings.

Pat Furey is a Senior Category Manager in Ariba’s Global Sourcing Organization. Pat leads the team of global category managers covering direct materials and indirect goods and services.