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ISM Mfg Index  
Released On 4/3/2017 10:00:00 AM For Mar, 2017
PriorConsensusConsensus RangeActual
ISM Mfg Index - Level57.7 57.1 56.0  to 58.5 57.2 

Highlights
It's 7 months in a row that the ISM has beaten the Econoday consensus though not by much in March, only by 1 tenth at 57.2. But the result is 5 tenths lower from February which is the first month-to-month slowing for this composite since August.

But slowing really isn't the theme as the new orders index is at 64.5 and though down slightly from February's 65.1 is still, outside of February, the second strongest reading since December 2013. And, unlike Markit Economics' PMI released earlier this morning, new export orders are very strong, up 4.0 points to 59.0 for the best showing since November 2013. Backlog orders are understandably piling up, 1/2 point higher to a 57.5 rate of monthly growth that was last matched in March 2014 and last exceeded in April 2011.

Employment is also very strong, at 58.9 for a 4.7 point gain and the best rate since June 2011. This is a very positive signal ahead of Friday's employment report where weather factors are suspected to have slowed employment. Yet there might be a sign of a weather effect in deliveries but nothing extraordinary as times did slow by a moderate 1.1 points to 55.9.

One parallel with Markit's report is unusual pressure in input costs, at 70.5 for the highest reading since May 2011. This is a strong signal of activity. Actual government data have not shown anywhere near the strength for the factory sector as have the bulk of anecdotal reports. But the anecdotal strength for the most part is not easing which is pointing very strongly to a pivot higher for factory data out of Washington.

Recent History Of This Indicator
With unusual strength in its sample, the ISM manufacturing index has beaten the Econoday consensus the last six reports in a row and by a sizable average of 1 full point and by 1.3 points in February. New orders have posted 3 straight 60 scores including a cycle-high 65.1 in February while backlogs surged to 57.5 for the best reading in 3 years, both of which point to special strength for production and employment in the March report. But this strength, as well as similar strength in other advance reports, has yet to appear in force in government data out of Washington. Forecasters are calling for a move lower, to 57.1 vs February's 57.7.

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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