Econoday Report: ISM Mfg Index 1, 2005

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ISM Mfg Index

Definition
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 4/1/05 For Mar 2005

ISM Mfg Index, Level
Actual	55.2
Consensus	55.0
Consensus Range	54.0 to 57.3

Highlights
The ISM manufacturing index edged lower in March but remains solid, at 55.2 vs. 55.3 in February.

New orders were strong rising to 57.1 vs. 55.8 in February and pointing to strong business conditions in the months ahead. Backlogs were especially strong, at 56.0 vs. 50.5.

Prices paid are signaling new troubles, coming in at 73.0 vs. 65.5 in February. Month-to-month costs for basic materials apparently are climbing at a faster rate -- this is bad news for the bond market which has been jittery following last week's FOMC warning on inflation.

The ISM data are in line with other readings on the manufacturing sector, pointing to steady and solid, but not accelerating, growth ahead.

Market Consensus Before Announcement
The ISM manufacturing index fell back to 55.3 in February, the third straight drop in the index. Market players will be closely monitoring the NAPM-Chicago for clues on Thursday, but these two didn't move in tandem in February.

ISM manufacturing index Consensus Forecast for March 05: 55
Range: 54 to 57.3

Trends

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

2005 Release Schedule

Released On: 1/3 2/1 3/1 4/1 5/2 6/1 7/1 8/1 9/1 10/3 11/1 12/1

Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov