Global| Oct 01 2013U.S. ISM Index Shows Further Improvement in Manufacturing Sector Activity
by:Tom Moeller
|in:Economy in Brief
Summary
The Composite Index of Manufacturing Sector Activity from the Institute for Supply Management rose to 56.2 during September from an unrevised 55.7 in August. The latest reading was the highest level since April 2011. It beat [...]
The Composite Index of Manufacturing Sector Activity from the Institute for Supply Management rose to 56.2 during September from an unrevised 55.7 in August. The latest reading was the highest level since April 2011. It beat expectations as measured by the Action Economics Survey for a slip to 55.4. Any figure above 50 indicates an increasing level of activity in the factory sector. During the last ten years, there has been a 69% correlation between the ISM index and the q/q change in real GDP.
The inventories component provided the greatest lift to the September total as it recovered following two months of weakness. The factory sector employment series provided further strength with a strong rise to 55.4, its highest level since June of last year. During the last ten years there has been an 88% correlation between the employment index and the m/m change in factory payrolls. The production and supplier delivery components rose slightly but the new orders index reversed roughly half of its August gain. The new export orders series fell to its lowest level since May but the order backlog component stood at its highest level since April.
The prices paid index improved further 56.5, its highest level since February. Twenty two percent of firms raised prices while just 9 percent lowered them, the least since February. During the last ten years there has been a 65% correlation between the index and the m/m change in the intermediate producer price index.
The figures from the Institute For Supply Management (ISM) are diffusion indexes and can be found in Haver's USECON database. The expectations data are in the AS1REPNA database.
| ISM Mfg | Sep | Aug | Jul | Sep'12 | 2012 | 2011 | 2010 |
|---|---|---|---|---|---|---|---|
| Composite Index | 56.2 | 55.7 | 55.4 | 51.6 | 51.7 | 55.2 | 57.3 |
| New Orders | 60.5 | 63.2 | 58.3 | 51.7 | 52.9 | 56.4 | 59.2 |
| Production | 62.6 | 62.4 | 65.0 | 51.4 | 53.6 | 57.4 | 61.0 |
| Employment | 55.4 | 53.3 | 54.4 | 53.7 | 53.8 | 57.4 | 57.3 |
| Supplier Deliveries | 52.6 | 52.3 | 52.1 | 50.5 | 50.0 | 54.7 | 58.1 |
| Inventories | 50.0 | 47.5 | 47.0 | 50.5 | 48.2 | 50.1 | 50.8 |
| Prices Paid Index (NSA) | 56.5 | 54.0 | 49.0 | 58.0 | 53.2 | 65.2 | 68.9 |
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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