Please consider the April 2023 Manufacturing ISM® Report On Business® by Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee:
ISM Key Points – Emphasis Mine
- “The April Manufacturing PMI® registered 47.1 percent, 0.8 percentage point higher than the 46.3 percent recorded in March.
- Regarding the overall economy, this figure indicates a fifth month of contraction after a 30-month period of expansion.
- The New Orders Index remained in contraction territory at 45.7 percent, 1.4 percentage points higher than the figure of 44.3 percent recorded in March.
- The Production Index reading of 48.9 percent is a 1.1-percentage point increase compared to March’s figure of 47.8 percent.
- The Prices Index registered 53.2 percent, up 4 percentage points compared to the March figure of 49.2 percent. The Backlog of Orders Index registered 43.1 percent, 0.8 percentage point lower than the March reading of 43.9 percent.
- The Employment Index elevated into expansion territory, registering 50.2 percent, up 3.3 percentage points from March’s reading of 46.9 percent.
- The Supplier Deliveries Index figure of 44.6 percent is 0.2 percentage point lower than the 44.8 percent recorded in March; this is the index’s lowest reading since March 2009 (43.2 percent).
- The Inventories Index dropped 1.2 percentage points to 46.3 percent, lower than the March reading of 47.5 percent.
- The New Export Orders Index reading of 49.8 percent is 2.2 percentage points higher than March’s figure of 47.6 percent.
- The Imports Index remained in contraction territory, though just barely, at 49.9 percent, 2 percentage points above the 47.9 percent reported in March.”
Diffusion Index Comments
There is more in the report. I put a spotlight on some of the key ideas.
The ISM is a diffusion index, signaling direction not amount. For example a firm hiring 10 workers and a firm laying off 200 workers balances out.
Diffusion indexes have issues. And there is a survival bias and a weighting bias.
This post originated on MishTalk.Com.
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By John Butters | May 1, 2023
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