2012 Economic Calendar
POWERED BY  econoday logo
Event Definitions   |   Today's Calendar   |   

ISM Mfg Index  
Released On 12/3/2012 10:00:00 AM For Nov, 2012
PriorConsensusConsensus RangeActual
ISM Mfg Index - Level51.7 51.7 49.9  to 52.5 49.5 

Highlights
Readings on the manufacturing sector have been bumpy and are a little bit more bumpy following the ISM's sub-50 reading of 49.5. This indicates monthly contraction in general business activity -- a contraction following two months of slight expansion and returning to the contraction of the three prior months.

New orders show only fractional growth relative to October with backlog orders showing an increasingly severe draw. Inventories are down significantly in the month in what is further evidence that businesses are taking a guarded view of future demand. Employment is especially weak in this report, showing the first monthly contraction in more than three years.

Delivery times are steady and production is respectable, offering no indication of dislocations tied to Hurricane Sandy. But disruptions may have hit orders and employment.

This report contrasts with indications of strength in the PMI manufacturing report issued earlier this morning. But taken together, including other reports on the sector, manufacturing appears to be moving sideways. The Dow is moving to opening lows in immediate reaction to today's report.

Consensus Outlook
The composite index from the ISM manufacturing survey showed mild improvement in October but remained soft. The ISM manufacturing index rose two-tenths on the month to 51.7. Importantly, forward momentum may be picking up as the new orders index rose to 54.2 from 52.3 in September. Production also improved, moving into positive territory at 52.4 from 49.5 in September.

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
 
 

2012 Release Schedule
Released On: 1/32/13/14/25/16/17/28/19/410/111/112/3
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


powered by  [Econoday]