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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 5/2/05 For Apr 2005 | ||||||||||
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Highlights
The ISM's manufacturing index fell notably in April, down to 53.3 vs. 55.2 in March. The index is extending a building series of declines indicating that growth in the nation's manufacturing sector, after rising sharply last year, is now decelerating.
The new orders index, which offers an indication of future activity in the sector, fell sharply to 53.7 from 57.1 in March. The plus-50 indicates that more manufacturers are reporting rising orders than those reporting declines, but the direction of the reading is clearly negative. Growth in backlog orders also weakened, to 53.0 from 56.0 in March.
The employment index also showed weakness, down to 52.3 from 53.3 in March. Easing growth in orders will not encourage manufacturers to expand their staffs.
Prices paid continued to show pressure at 71.0 vs. 73.0 in March. This reading reflects high energy prices and runs a bit counter to other reports that price increases for many raw materials, such as steel, are easing.
Inventories took a big spill, down to 47.9 from 54.1 in March. The reading suggests that manufacturers, in anticipation of slowing demand, may be cutting back their stocks.
The financial markets showed little reaction to the ISM report, which was accompanied by strong construction spending data. But manufacturing, unlike housing, is becoming a less strong part of the economy, an important topic for policy makers at tomorrow's FOMC meeting.
The ISM manufacturing index was virtually unchanged in March at 55.2. In April, the business barometer from the NAPM-Chicago decreased 3.6 percentage points to 65.6. This index tends to rise and fall more sharply than the ISM. Also, remember that the Chicago index includes all business activity, not just the manufacturing sector.
ISM manufacturing index Consensus Forecast for April 05: 54.8
Range: 53.5 to 57.5
![[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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