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ISM Mfg Index
Released On 6/2/2014 10:00:00 AM For May, 2014
PriorConsensusConsensus RangeActual
ISM Mfg Index - Level54.9 55.5 54.6  to 56.6 55.4 

Highlights
The ISM has corrected its PMI to 55.4 in May from an originally reported 53.2. The correction, which is tied to seasonal adjustment calculations, pretty much turns the original report upside down, from sizable deceleration in monthly growth to slight acceleration in monthly growth.

Those components that are seasonally adjusted -- new orders, production, employment, supplier deliveries -- now all show greater rates of monthly growth than the original report.

New orders are now at a very solid 56.9, well up from 55.1 in April which points to acceleration ahead for composite activity this summer. Production, up 5.3 points from April, is now especially strong at 61.0 for the best reading of the year, while employment, at 52.8, is still on the soft side but less so than the original report. Supplier deliveries show less improvement than the initial report which again is a sign of greater strength in activity than originally reported.

This report, instead of contrasting with today's earlier release of Markit's PMI, now confirms strength. The Dow moved to opening lows following the original report and is now moving to session highs following the correction.

Market Consensus before announcement
The composite index from the ISM manufacturing survey for April rose 1.2 points to a better-than-expected level of 54.9. Employment, which has been very soft in this report, bounced 3.6 points higher to a respectable 54.7. New orders were at a solid 55.1, unchanged from March, with new export orders up 1.5 points to a very strong 57.0. Backlog orders were solid at 55.5. Production was little changed from March at 55.7-a still notably positive reading.

Definition
The ISM manufacturing composite index 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 transformed 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
 

 

2014 Release Schedule
Released On: 1/22/33/34/15/16/27/18/19/210/111/312/1
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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