Global| Oct 02 2017ISM Factory Sector Index Strengthens to 13-Year High
by:Tom Moeller
|in:Economy in Brief
Summary
Factories were humming last month. The ISM manufacturing sector composite index jumped to 60.8 during September from August's unrevised reading of 58.8. It indicated the 13th strait month of increased factory sector activity, and the [...]
Factories were humming last month. The ISM manufacturing sector composite index jumped to 60.8 during September from August's unrevised reading of 58.8. It indicated the 13th strait month of increased factory sector activity, and the figure was at its highest level since May 2004. A level of 58.0 had been expected in the Action Economics Forecast Survey.
The new orders index increased to 64.6, the highest level in six months. As a result of this strengthening, the supplier delivery series surged to 64.4, indicating the slowest speeds of product delivery since July 2004. The production series ticked higher, but the inventories index fell following sharp increases since 2015.
The employment figure increased slightly to 60.3, indicating the twelfth straight month of payroll expansion. During the last ten years, there has been an 88% correlation between the index and the m/m change in factory sector employment. Twenty-four percent (NSA) of respondents reported higher employment while seven percent indicated a decline.
The prices paid index surged to 71.5, its highest level since May 2011. Forty-five percent (NSA) of respondents reported paying higher prices while two percent paid less.
The export order index rose slightly to 57.0, down from its June high but up sharply versus all of 2015. The import order index slipped and remained below its July high. The order backlog series improved and was up sharply from the 2015 low.
The ISM figures are diffusion indexes where a reading above 50 indicates increase. The figures from the Institute for Supply Management can be found in Haver's USECON database. The expectations number can be found in Haver's AS1REPNA database.
| ISM Mfg (SA) | Sep | Aug | Jul | Sep'16 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Composite Index | 60.8 | 58.8 | 56.3 | 51.7 | 51.5 | 51.4 | 55.6 |
| New Orders | 64.6 | 60.3 | 60.4 | 55.0 | 54.7 | 52.6 | 58.9 |
| Production | 62.2 | 61.0 | 60.6 | 53.3 | 54.0 | 53.5 | 59.2 |
| Employment | 60.3 | 59.9 | 55.2 | 50.0 | 49.7 | 51.0 | 54.4 |
| Supplier Deliveries | 64.4 | 57.1 | 55.4 | 50.8 | 51.9 | 50.7 | 55.0 |
| Inventories | 52.5 | 55.5 | 50.0 | 49.5 | 47.2 | 49.0 | 50.8 |
| Prices Paid Index (NSA) | 71.5 | 62.0 | 62.0 | 53.0 | 53.5 | 39.8 | 55.6 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
