2018 Economic Calendar
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ISM Mfg Index  
Released On 7/2/2018 10:00:00 AM For Jun, 2018
PriorConsensusConsensus RangeActual
ISM Mfg Index - Level58.7 58.5 57.0  to 60.0 60.2 

Highlights
Capacity stress, due to robust demand and also tariff disruptions, is a major concern for ISM's manufacturing sample. ISM's index, up 1.5 points in June to 60.2, topped Econoday's consensus range and got a boost from long delays in supplier deliveries, up more than 6 points to 68.2 to signal some of the worst disruptions since the oil crises of the mid-70s. Comments from the sample are focused on trucking constraints and also tariff effects and related uncertainties including the inability to plan ahead.

Yet the delays are not slowing production, up nearly a point in June to 62.3, though effects may be thinning inventories of finished goods which the sample is warning are too low. Input costs, though down slightly at 76.8, are nevertheless extremely elevated.

Order readings in this report continue to run at maximum performance, little changed at 63.5 for new orders and holding over 60 for backlog orders, at 60.1 which is very rare for this reading. Export orders, at 56.3, are holding strong despite tariffs as are import orders, up nearly 5 points at 59.0 in a reading that measures volumes and is not inflated by dollar hikes in tariffs.

Despite all the stress, ISM's sample continues to find available workers with employment steady at a very solid 56.0. Whatever hints there were of slowing in manufacturing, from weakness in the Philly Fed and loss of momentum in the flash PMI, June appears very likely to have been yet another month of acceleration for a factory sector that, tariffs or not, is taking a leading position in the 2018 economy.

Consensus Outlook
Econoday's consensus is calling for slight slowing at a still elevated level for the ISM manufacturing index, to 58.5 in June vs 58.7 in a May. But the top-end forecast is calling for acceleration to 60.0 in a reminder that both new orders and, in a rarity, backlog orders were both well over 60 in the last report.

Definition
The manufacturing composite index from the Institute For Supply Management is a diffusion index calculated from five of the eleven sub-components of a monthly survey of purchasing managers at roughly 300 manufacturing firms nationwide. The survey queries purchasing managers about the general direction of production, new orders, order backlogs, their own inventories, customer inventories, employment, supplier deliveries, exports, imports, and prices. The five components of the composite index are new orders, production, employment, supplier deliveries, and inventories (their own, not customer inventories). The five components are equally weighted. The questions are qualitative rather than quantitative; that is, they ask about the general direction rather than the specific level of activity. Each question is adjusted into a diffusion index which is calculated by adding the percentage of positive responses to one-half of the unchanged responses.  Why Investors Care
 
[Chart]
The ISM manufacturing index [formerly known as the NAPM Survey] is constructed so that any level at 50 or above signifies growth in the manufacturing sector. A level above 43 or so, but below 50, indicates that the U.S. economy is still growing even though the manufacturing sector is contracting. Any level below 43 indicates that the economy is in recession.
Data Source: Haver Analytics
 
 

2018 Release Schedule
Released On: 1/32/13/14/25/16/17/28/19/410/111/112/3
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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