Global| Aug 01 2016ISM Manufacturing Index Slips; Prices Paid Index Declines
by:Tom Moeller
|in:Economy in Brief
Summary
The ISM Composite Index of manufacturing activity eased to 52.6 during July from an unrevised 53.2 in June. A reading of 53.0 had been expected in the Action Economics Forecast Survey. The decline left the average for the first seven [...]
The ISM Composite Index of manufacturing activity eased to 52.6 during July from an unrevised 53.2 in June. A reading of 53.0 had been expected in the Action Economics Forecast Survey. The decline left the average for the first seven months this year at 51.1, little changed from 51.3 averaged in 2015. During the last ten years, there has been a 75% correlation between the index level and the q/q change in real GDP.
The supplier delivery index posted the largest decline amongst the component series. Its fall to 51.8 indicated the quickest product delivery speeds in three months. Also moving lower was the employment index to 49.4, though that remained up from the 45.9 low six months ago. During the last ten years, there has been an 88% correlation between the index level and the m/m change in factory sector payrolls. The new orders index was little changed at 56.9, but remained improved versus the below-50 readings at the end of last year. To the upside, the production index rose to 55.4, its highest level since January of last year. The improved inventory reading of 49.5 was the highest figure in 12 months.
The separate prices paid figure fell to 55.0, down for the second straight month from the recent high of 63.5. Twenty-two percent (NSA) of respondents reported paying higher prices while 12 percent paid less.
Amongst the other ISM series, the export index fell to 52.5 from 53.5. It remained up, nevertheless, from the February low of 46.5. The imports index was stable at 52.0, also up from the December low of 45.5. The order backlog index fell to 48.0, its lowest reading in six months.
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 is in Haver's AS1REPNA database.
Which Households Have Negative Wealth? from the Federal Reserve Bank of New York is available here.
| ISM Mfg (SA) | Jul | Jun | May | Jul '15 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Composite Index | 52.6 | 53.2 | 51.3 | 51.9 | 51.3 | 55.6 | 53.8 |
| New Orders | 56.9 | 57.0 | 55.7 | 53.6 | 52.6 | 58.9 | 56.8 |
| Production | 55.4 | 54.7 | 52.6 | 55.0 | 53.5 | 59.2 | 57.5 |
| Employment | 49.4 | 50.4 | 49.2 | 51.9 | 51.0 | 54.4 | 53.1 |
| Supplier Deliveries | 51.8 | 55.4 | 54.1 | 49.3 | 50.7 | 55.0 | 51.9 |
| Inventories | 49.5 | 48.5 | 45.0 | 49.5 | 49.0 | 50.8 | 49.4 |
| Prices Paid Index (NSA) | 55.0 | 60.5 | 63.5 | 44.0 | 39.8 | 55.6 | 53.8 |
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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