Global| Apr 01 2015U.S. ISM Manufacturing Index Is Depressed
by:Tom Moeller
|in:Economy in Brief
Summary
Factory sector activity remains without forward momentum. The March Composite Index from the Institute for Supply Management (ISM) declined to 51.5 following its February drop to an unrevised 52.9. It was the lowest level since May [...]
Factory sector activity remains without forward momentum. The March Composite Index from the Institute for Supply Management (ISM) declined to 51.5 following its February drop to an unrevised 52.9. It was the lowest level since May 2013. A reading of 52.5 was expected in the Action Economics Forecast Survey. During the last ten years, there has been a 74% correlation between the level of the index and the q/q change in real GDP.
The supplier delivery index plummeted to 50.5, showing the quickest product delivery speeds since May 2013. The employment reading also fell sharply to a break-even 50.0, the lowest point since May 2013. During the last ten years, there has been a 65% correlation between the jobs number and the m/m change in factory sector employment. Inventories fell modestly to 51.5 as did new orders (51.8), though new orders had dropped sharply during the prior four months. The production index nudged up to 53.8, though it too was down hard in the prior four months.
The prices paid index recovered to 39.0, the highest level since November. The latest level was down, however, from 60.5 in January of last year. Ten percent of respondents indicated paying higher prices while 32% paid less.
The figures from the Institute For Supply Management (ISM) are diffusion indexes and can be found in Haver's USECON database. The expectations number is in the AS1REPNA database.
| ISM Mfg | Mar | Feb | Jan | Mar'14 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| Composite Index | 51.5 | 52.9 | 53.5 | 54.4 | 55.7 | 53.8 | 51.7 |
| New Orders | 51.8 | 52.5 | 52.9 | 56.4 | 59.0 | 56.9 | 52.9 |
| Production | 53.8 | 53.7 | 56.5 | 57.3 | 59.2 | 57.5 | 53.7 |
| Employment | 50.0 | 51.4 | 54.1 | 51.9 | 54.5 | 53.2 | 53.8 |
| Supplier Deliveries | 50.5 | 54.3 | 52.9 | 53.8 | 55.0 | 51.9 | 50.0 |
| Inventories | 51.5 | 52.5 | 51.0 | 52.5 | 50.8 | 49.4 | 48.2 |
| Prices Paid Index (NSA) | 39.0 | 35.0 | 35.0 | 59.0 | 55.6 | 53.8 | 53.2 |
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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