According to the latest non-manufacturing industry survey by the Institute for Supply Management (ISM), it is highly likely that signs of growth and possibly economic recovery will be visible by the end of this year.  The ISM has been making this prediction for some time now, and the report on business activity in the non-manufacturing sector in June indicates the economy is definitely headed in that direction, says Anthony Nieves, chair of ISM’s non-manufacturing business survey committee. “The report is encouraging,” he says.

Overall, the non-manufacturing index went up 3 percentage points in June to 44%. Technically, anything under 50% is considered to be “contracting,” but Nieves says the trend over the last few months has been a positive one, indicating that the index is creeping steadily upward and showing a gradual improvement in the overall non-manufacturing sector.

“I think we’re seeing the signs of the leveling off,” Nieves says. He adds that he’s especially encouraged by the business activity and new orders indexes. Business activity leapt up 7.4 percentage points to 49.8%, while new orders went up 4.2 points to 48.6%.

Nieves says he’ll be watching both indices over the next few months, especially new orders, to verify that the growth trend overall is continuing.

The employment index, which typically lags behind everything else, also took a jump in June. According to the report, it went up 4.4 points to 43.4%, but despite this increase, Nieves says employment tends to be the slowest to react to changes, even positive ones, in the overall sector.

“I think you’ll see the other indexes go up to 50 and above before employment,” he says.

The report shows that the real estate, rental and leasing category leads in growth, but Nieves says that’s a bit misleading, since most of the recorded growth in that category was only in the rental and leasing side.

More encouraging, he says, is food services and arts, entertainment and recreation, which also showed growth in June. Nieves says these industries will be the ones to watch over the next few months.