Global| Jun 01 2005ISM Factory Index Fell Again
by:Tom Moeller
|in:Economy in Brief
Summary
In a move foreshadowed by earlier reports from regions around the US, the May Composite Index of activity in the manufacturing sector compiled by the Institute of Supply Management fell another 1.9 points to 51.4. The index has fallen [...]
In a move foreshadowed by earlier reports from regions around the US, the May Composite Index of activity in the manufacturing sector compiled by the Institute of Supply Management fell another 1.9 points to 51.4. The index has fallen steadily from the peak of 62.8 in January 2004. Consensus expectations had been for a lesser decline to 52.5.
During the last twenty years there has been a 64% correlation between the level of the Composite Index and the three month growth in factory sector industrial production.
A lower new orders (51.7) component led the composite down for the fourth month this year while the index of export orders (54.9) fell to its lowest since September.
The employment index (48.8) fell below the break even level of 50 for the first month since October 2003. During the last twenty years there has been a 67% correlation between the level of the ISM Employment Index and the three month growth in factory sector employment.
The production index (54.9) fell to its lowest since June 2003 and the pace of vendor deliveries sped up to the quickest in nearly two years.
The prices paid index fell sharply to the lowest since October 2003. During the last twenty years there has been an 81% correlation between vendor delivery speed and prices.
| ISM Manufacturing Survey | May | April | May '04 | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Composite Index | 51.4 | 53.3 | 62.6 | 60.5 | 53.3 | 52.4 |
| New Orders Index | 51.7 | 53.7 | 63.9 | 63.5 | 57.9 | 56.5 |
| Prices Paid Index (NSA) | 58.0 | 71.0 | 86.0 | 79.8 | 59.6 | 57.6 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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