2010 Economic Calendar
POWERED BY  econoday logo
Event Definitions   |   Today's Calendar   |   

ISM Mfg Index  
Released On 9/1/2010 10:00:00 AM For Aug, 2010
PriorConsensusConsensus RangeActual
ISM Mfg Index - Level55.5 53.0 51.5  to 54.5 56.3 

Highlights
Lagging factors gave what is a bit of a deceptive boost to the ISM's manufacturing index masking a further slowing in the key leading index of new orders. The PMI came in at a stronger-than-expected 56.3 for a sizable eight tenths gain from July. The reading is well over 50 to signal month-to-month growth and in the comparison with July, to signal growth at an accelerating rate. But this growth is in general business activity: production, employment, inventories. These three factors all accelerated in August with a special note on inventories where the gain may reflect in part an unwanted build.

New orders slowed but just a bit, down four tenths to 53.1 for its lowest reading since the manufacturing recovery began in the second quarter of last year. Unfilled orders also slowed, down three points to 51.5 and its weakest reading since December. The slowing in order build is certain to limit future improvement in business activity.

Still today's report is solid and includes strength in both exports and imports and an increase in prices paid that reflects demand for inputs. Though the slowing in orders is a concern, stocks are rising on this report.

Recent History Of This Indicator
The composite index from the ISM manufacturing survey eased to 55.5 from 56.2 in June – but still reflected moderate growth in activity as the reading topped the breakeven point of 50. Production slowed nearly 4-1/2 points in July to what for now is a still very strong 57.0. Looking ahead, we may see more moderation in the composite in August as the July new orders index fell to 53.5 from 58.5 in June.

Definition
The manufacturing composite index from the Institute For Supply Management is a diffusion index calculated from five of the eleven sub-components of a monthly survey of purchasing managers at roughly 300 manufacturing firms nationwide. The survey queries purchasing managers about the general direction of production, new orders, order backlogs, their own inventories, customer inventories, employment, supplier deliveries, exports, imports, and prices. The five components of the composite index are new orders, production, employment, supplier deliveries, and inventories (their own, not customer inventories). The five components are equally weighted. The questions are qualitative rather than quantitative; that is, they ask about the general direction rather than the specific level of activity. Each question is adjusted into a diffusion index which is calculated by adding the percentage of positive responses to one-half of the unchanged responses.  Why Investors Care
 
[Chart]
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
 
 

2010 Release Schedule
Released On: 1/42/13/14/15/36/17/18/29/110/111/112/1
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


powered by  [Econoday]