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2008 Economic Calendar |
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Resource Center » U.S. & Intl Recaps | Release Dates | Why Investors Care | Today's Calendar
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The Institute for Supply Management surveys nearly 400 manufacturing firms on employment, production, new orders, supplier deliveries, and inventories. A composite diffusion index of national manufacturing conditions is constructed, where reading above (below) 50 percent indicate an expanding (contracting) factory sector. Export orders, import orders, backlog orders and prices paid for raw and unfinished materials are also measured, but these are not included in the overall index. Why Investors Care
| Released on 1/3/05 For Dec 2004 | ||||||||||
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Highlights
The ISM manufacturing index increased less than one full point in December to 58.6 from November's level of 57.8. The rise was only slightly higher than the market consensus, and reflects a relatively healthy pace of activity in the manufacturing sector. The new orders components jumped several points to 67.4 in December and was quite a bit higher than levels for the past several months. Production was essentially unchanged for the month as the level for this component stood at 56.9, just a tick less than November's level. However, the November-December levels were down from levels posted earlier in the year, suggesting a slightly slower pace of production in the final months of 2004 relative to earlier in the year. The employment index fell back to 52.7 from a level of 57.6. It still points to rising employment levels, but at a slower pace. Supplier deliveries also inched down in December, but remain above the important 50 percent mark which signifies expansion. The prices paid index fell back to 72, from a level of 74. The index has been in a moderating mode for the past few months, and is down from the higher levels posted in the summer. Nevertheless, this still reflects rising prices.
All in all, the ISM survey showed a healthy pace of growth in the manufacturing sector. It appears that activity moderated from the stronger pace seen at mid-year, but was certainly still in expansion mode. These figures should be friendly news for the equity markets, but less so for bonds where good news for the economy can lift bond yields.
The ISM manufacturing survey increased 1 point in November to 57.8, but remained well below the 60+ levels seen through July. The two Fed manufacturing surveys from Philadelphia and New York both increased in December and this could point to a rise in the ISM index as well, even though the NAPM-Chicago slipped during the month.
ISM manufacturing index Consensus Forecast for Dec 04: 58.2
Range: 56.5 to 60
![[Chart]](chart.gif)
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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. |
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