Global| Jan 02 2004ISM Factory Index Up Further
by:Tom Moeller
|in:Economy in Brief
Summary
The Purchasing Managers Composite Index (PMI) released by the Institute of Supply Management rose to 66.2 in December from 62.8 in November. It was the highest level for the Composite Index since December 1983. Consensus expectations [...]
The Purchasing Managers’ Composite Index (PMI) released by the Institute of Supply Management rose to 66.2 in December from 62.8 in November. It was the highest level for the Composite Index since December 1983. Consensus expectations were for a reading of 61.0.
During the last twenty years there has been a 72% correlation between the level of the PMI index and the three month growth in factory sector industrial production. There has been a 58% correlation between the level of the PMI Composite Index and quarterly growth in real GDP.
The new orders index rose to 77.6, the highest level since July 1950. The production index also jumped to 73.0, the highest level since December 1983.
The employment index at 55.5 has risen nearly 10 points during the last three months. There has been a 72% correlation during the last ten years between the ISM employment index and the one-month change in factory sector payrolls.
The inventory index fell to 47.3 and reversed half of the prior month's gain.
The prices paid index rose last month to 66.0, the highest level since May 2000. There has been a 28% correlation between the prices paid index and the y/y change in the finished goods PPI over the last ten years. The correlation with the intermediate materials PPI has been a higher 63%.
| ISM Manufacturing Survey | Dec | Nov | Dec '02 | 2003 | 2002 | 2001 |
|---|---|---|---|---|---|---|
| Composite Index | 66.2 | 62.8 | 55.2 | 53.5 | 52.4 | 44.0 |
| New Orders Index | 77.6 | 73.7 | 62.9 | 58.3 | 56.7 | 46.2 |
| Prices Paid Index (NSA) | 66.0 | 64.0 | 55.0 | 59.6 | 57.6 | 42.9 |
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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