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ISM Mfg Index  
Released On 3/1/2017 10:00:00 AM For Feb, 2017
PriorConsensusConsensus RangeActual
ISM Mfg Index - Level56.0 56.4 55.5  to 58.5 57.7 

Highlights
In a report of rare strength, the ISM manufacturing index jumped 1.7 points in February to a 57.7 level that beats the Econoday consensus by 1.3 points. This is the strongest rate of monthly growth in composite activity since August 2014.

The report in fact is filled with superlatives led by a 4.7 point jump in new orders to 65.1. This rate of monthly growth was last matched in December 2013 and last exceeded in August 2009. Backlog orders jumped 7.5 points to 57.5 in a reading last exceeded in March 2014. Production is also very strong, up 1.5 points to a 62.9 level that is the best since March 2011.

But perhaps most impressive is the breadth of strength with 17 of 18 industries reporting monthly growth. One note of concern amid all this strength, however, is cost inflation, which held near a 6-year high at 68.0.

Another positive in the report, and one that contrasts with this morning's manufacturing PMI, is solid strength in export orders which rose 1/2 point to 55.0. Other readings include a modest and welcome rise in raw material inventories, understandable delays in deliveries, and moderate employment strength at 54.8.

This report perhaps is the greatest expression yet of post-election strength in anecdotal surveys, strength that has yet however to find its way to actual government data on the factory sector which have been consistently soft.

Recent History Of This Indicator
The ISM manufacturing index has beaten the consensus the last five reports and by a sizable average of 9 tenths in the last three reports. New orders have posted back-to-back 60 scores with production and employment likewise moving higher. Input costs are at a recovery high. Forecasters are calling for 56.4 vs January's 56.0.

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
 
 

2017 Release Schedule
Released On: 1/32/13/14/35/16/17/38/19/110/211/112/1
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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