Global| Mar 01 2006ISM Index Recovered, New Orders Surged
by:Tom Moeller
|in:Economy in Brief
Summary
The Institute of Supply Management (ISM) reported that the February Composite Index of activity in the manufacturing sector recovered 1.9 points to 56.7, the first m/m increase since October. Consensus expectations had been for a [...]
The Institute of Supply Management (ISM) reported that the February Composite Index of activity in the manufacturing sector recovered 1.9 points to 56.7, the first m/m increase since October. Consensus expectations had been for a lesser increase to 55.2.
During the last twenty years there has been a 68% 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 last month except vendor deliveries which, at 52.2, is off sharply from the 2004 high of 68.5. The new orders index rose to the highest level (61.9) in more than a year and the employment index recovered to the highest level (55.0) since November. 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.
Production recovered most of the drop in January but it was only the first increase in the last five months and the inventory index rose sharply to nearly a one year high.
The price index slipped 2.5 points to its lowest level since last summer. During the last twenty years there has been a 77% correlation between the price index and the three month change in the PPI for intermediate goods.
| ISM Manufacturing Survey | Feb | Jan | Feb '05 | 2005 | 2004 | 2003 |
|---|---|---|---|---|---|---|
| Composite Index | 56.7 | 54.8 | 55.6 | 55.5 | 60.5 | 53.3 |
| New Orders Index | 61.9 | 58.0 | 56.4 | 57.4 | 63.5 | 57.9 |
| Prices Paid Index (NSA) | 62.5 | 65.0 | 65.5 | 66.4 | 79.8 | 59.6 |
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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