Global| Oct 03 2005ISM Index Lifted by Hurricane Rebuilding & Inventory Restocking
by:Tom Moeller
|in:Economy in Brief
Summary
The Institute of Supply Management reported that the Composite Index of activity in the manufacturing sector jumped unexpectedly to 59.4 from 53.6 in September. Consensus expectations had been for a decline to 52.0. During the last [...]
The Institute of Supply Management reported that the Composite Index of activity in the manufacturing sector jumped unexpectedly to 59.4 from 53.6 in September. Consensus expectations had been for a decline to 52.0.
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.
Each of the index's five components rose though the 7.4 point rise in new orders to a more than one year high and a like gain in production seemed noteworthy after earlier months' easing. 
The rise in the inventories index to the second highest level of the year suggests that the destocking efforts of the prior five months are winding down. The vendor deliveries index increased to highest since last October.
The rate of factory sector job creation rose slightly though the index at 53.1 contrasts with recent government data that suggest job loss. 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.
Pricing in the factory sector firmed even more to the highest since last October. The prices paid index rose to 78.0 on top of last month's increase.
Hurricane Katrina and the Employment Situation report for September 2005, to be released this Friday, from the U.S. Department of Labor is available here.
| ISM Manufacturing Survey | Sept | Aug | Sept '04 | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Composite Index | 59.4 | 53.6 | 59.1 | 60.5 | 53.3 | 52.4 |
| New Orders Index | 63.8 | 56.4 | 59.9 | 63.5 | 57.9 | 56.5 |
| Prices Paid Index (NSA) | 78.0 | 62.5 | 76.0 | 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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