Global| Jun 01 2011U.S. ISM Factory Index Falls To Near Recovery Low
by:Tom Moeller
|in:Economy in Brief
Summary
The Composite Index of activity in the factory sector from the Institute for Supply Management dropped sharply last month to 53.5 from an unrevised 60.4 in April. On many counts, the figure was a disappointment. It was the lowest [...]
The Composite Index of activity in the factory sector from the Institute for Supply Management dropped sharply last month to 53.5 from an unrevised 60.4 in April. On many counts, the figure was a disappointment. It was the lowest since September 2009.
Declines were widespread amongst the components. Finally, it was lower than Consensus expectations for 57.8. However, the reading continued to indicate positive factory growth and was the twenty-second consecutive monthly figure above the break-even level of 50. It was up from the low of 32.5 reached in December '08.
Declines in each of the components contributed to the lower composite index. The largest m/m decline was in new orders followed by production. The jobs figure also fell sharply to the lowest level since October. (During the last ten years there has been a 90% correlation between the jobs index and the m/m change in factory sector payrolls.) The supplier delivery index also fell indicating faster delivery speeds and the inventory index showed decumulation
The separate index of new export orders fell sharply to the lowest level this year. The index of prices backpedaled to 76.5, also its lowest level this year. A reduced 58% (NSA) of respondents reported higher prices while a slightly increased 5% indicated lower prices.
The ISM figures can be found in Haver's USECON database. The forecast data is in the AS1REPNA database.
| ISM Mfg | May | Apr | Mar | May'10 | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Composite Index | 53.5 | 60.4 | 61.2 | 57.8 | 57.3 | 46.3 | 45.5 |
| New Orders | 51.0 | 61.7 | 63.3 | 61.0 | 59.2 | 51.6 | 42.1 |
| Employment | 58.2 | 62.7 | 63.0 | 57.4 | 57.3 | 40.5 | 43.3 |
| Production | 54.0 | 63.8 | 69.0 | 63.8 | 61.1 | 50.5 | 45.1 |
| Supplier Deliveries | 55.7 | 60.2 | 63.1 | 60.6 | 58.1 | 51.5 | 51.6 |
| Inventories | 48.7 | 53.6 | 47.4 | 46.2 | 50.8 | 37.1 | 45.5 |
| Prices Paid Index (NSA) | 76.5 | 85.5 | 85.0 | 77.5 | 68.9 | 48.3 | 66.5 |
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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