Econoday Economic Report: ISM Mfg Index April 1, 2009

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ISM Mfg Index

Released On 4/1/2009 10:00:00 AM For Mar, 2009

	Prior	Consensus	Consensus Range	Actual
ISM Mfg Index - Level	35.8	36.0	33.5 to 37.5	36.3

Highlights
Incremental improvement in the manufacturing sector is the best that can be hoped for right now in what is deceptively positive news for the economy. The ISM's manufacturing index edged 5 tenths higher to 36.3 in March. New orders offers very good news as the index jumped more than 8 points to 41.2 in a reading that points to further improvement in durable goods orders. Backlog orders also improved as did employment while production held steady. Prices paid, little changed at 31.0, continues to indicate disinflationary pressures. Stocks pared losses in immediate reaction to the report, one which will build talk that the deepest part of the recession may be passing or may have already passed.

Market Consensus before announcement
The Institute for Supply Management's manufacturing index edged 2 tenths higher in February to a 35.8 level that is only modestly above December's low of 32.9. Looking ahead, readings on new and unfilled orders were stable in February but deeply in negative territory at 33.1 and 31.0, respectively. This would indicate little improvement in the near term for the overall index.

Definition
The Institute for Supply Management surveys more than 300 manufacturing firms on employment, production, new orders, supplier deliveries, and inventories. A composite diffusion index of national manufacturing conditions is constructed, where readings above (below) 50 percent indicate an expanding (contracting) factory sector. Export orders, import orders, backlog orders and prices paid for raw and unfinished materials are also measured, but these are not included in the overall index. Why Investors Care

The ISM manufacturing index (formerly known as the NAPM Survey) is constructed so that any level at 50 or above signifies growth in the manufacturing sector. A level above 43 or so, but below 50, indicates that the U.S. economy is still growing even though the manufacturing sector is contracting. Any level below 43 indicates that the economy is in recession.
Data Source: Haver Analytics

2009 Release Schedule

Released On: 1/2 2/2 3/2 4/1 5/1 6/1 7/1 8/3 9/1 10/1 11/2 12/1

Release For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov