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ISM Mfg Index  
Released On 12/3/2018 10:00:00 AM For Nov, 2018
PriorConsensusConsensus RangeActual
ISM Mfg Index - Level57.7 57.2 56.0  to 58.3 59.3 

Highlights
Re-acceleration to unusually strong rates of growth is November's theme for ISM's manufacturing sample. The headline composite of 59.3 is 1.6 points higher than October and easily tops Econoday's top estimate. And new orders, at 62.1, are up 4.7 points and quickly back over 60 where, in one of the longest runs in the long history of this report, it had held for a year-and-half.

Backlogs continue to build strongly, up 8 tenths to 56.4, and are underscoring demand for labor as employment increased 1.6 points to 58.4. Production is at 60.6 with supplier deliveries at a very elevated 62.5 and continuing to be stretched. Inventory data are mixed with raw materials rising moderately but finished goods easing. An easing in input costs is a positive in the report, down nearly 10 points to a less severe 60.7.

Lack of acceleration in export orders, holding at a modest 52.2, is a negative in the report as is lack of breadth among the 18 industries as three reported contraction in the month, including primary metals, with two reporting no change. Tariff pressures as well as material and labor shortages remain common areas of concern in the sample.

This sample has been consistently running hotter than definitive data out of the factory sector yet the general indication has been very accurate: rising rates of growth. Watch for October factory orders from the Census Bureau to be posted this Thursday.

Consensus Outlook
Steady to easing strength is what Econoday's forecasters see for the November ISM manufacturing index where the consensus is 57.2 vs 57.7 in October, a month that, despite mostly strong readings throughout, missed low estimates and broke a long 60-plus string for new orders.

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]
Readings above 50 in the ISM manufacturing index signal month- to-month growth for U.S. manufacturing as a whole, while those below 50 indicate monthly contraction. For the economy as a whole, readings above 60 signal national GDP growth of 5 percent, while those below 43 signal GDP contraction.
Data Source: Haver Analytics
 
 

2018 Release Schedule
Released On: 1/32/13/14/25/16/17/28/19/410/111/112/3
Release For: DecJanFebMarAprMayJunJulAugSepOctNov
 


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