Global| Aug 01 2017ISM Factory Sector Index Backpedals
by:Tom Moeller
|in:Economy in Brief
Summary
The ISM factory sector composite index fell to 56.3 during July from June's unrevised reading of 57.8. The index has been close to this level all year, but remained well above the 2015 low of 47.9. A level of 56.4 had been expected in [...]
The ISM factory sector composite index fell to 56.3 during July from June's unrevised reading of 57.8. The index has been close to this level all year, but remained well above the 2015 low of 47.9. A level of 56.4 had been expected in the Action Economics Forecast Survey.
Declines in the component series were numerous. The new orders series fell m/m to 60.4, down from the February high of 65.1. The production index also eased to 60.6, but remained up from 54.0 averaged last year. The supplier deliveries index declined to 55.4, indicating, a quicker pace of product delivery speeds. Nevertheless, speeds have been slowing since early last year. Working the other way, the inventories series rose to 50.0, up sharply from late-2015.
The employment figure declined m/m to 55.2, also up from a low of 46.2 early in 2016. Payrolls have been expanding for ten straight months. During the last ten years, there has been an 87% correlation between the index and the m/m change in factory sector employment. Twenty-four percent (NSA) of respondents reported higher employment while 10% indicated a decline.
The prices paid index jumped to 62.0, its highest level in three months, but remained below the March 2017 high of 70.5. Thirty-three percent (NSA) of respondents reported paying higher prices while nine percent paid less.
The export order index eased to 57.5, down slightly from the March high of 59.5, but up sharply from 48.6 during all of 2015. The import order index rose to a three-year high of 56.0. The order backlog series eased to 55.0, but also remained up sharply from the 2015 low.
The ISM figures are diffusion indexes where a reading above 50 indicates increase. The figures from the Institute for Supply Management can be found in Haver's USECON database. The expectations number can be found in Haver's AS1REPNA database.
| ISM Mfg (SA) | Jul | Jun | May | Jul'16 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Composite Index | 56.3 | 57.8 | 54.9 | 52.3 | 51.5 | 51.4 | 55.6 |
| New Orders | 60.4 | 63.5 | 59.5 | 56.1 | 54.7 | 52.6 | 58.9 |
| Production | 60.6 | 62.4 | 57.1 | 54.8 | 54.0 | 53.5 | 59.2 |
| Employment | 55.2 | 57.2 | 53.5 | 49.3 | 49.7 | 51.0 | 54.4 |
| Supplier Deliveries | 55.4 | 57.0 | 53.1 | 51.8 | 51.9 | 50.7 | 55.0 |
| Inventories | 50.0 | 49.0 | 51.5 | 49.5 | 47.2 | 49.0 | 50.8 |
| Prices Paid Index (NSA) | 62.0 | 55.0 | 60.5 | 55.0 | 53.5 | 39.8 | 55.6 |
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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