|Unit||Diffusion index, SA|
|Business Confidence||Dec 2019||98.77||98.86||Index long term avg=100, SA||Monthly|
|Capacity Utilization||Dec 2019||77.02||77.37||%, SA||Monthly|
|Industrial Production||Dec 2019||109.43||109.76||Index 2012=100, SA||Monthly|
|Purchasing Managers index||Dec 2019||47.2||48.1||Diffusion index, SA||Monthly|
|Change in Inventories||2019 Q3||67,047||74,798||Mil. USD, SAAR||Quarterly|
|Real Change in Inventories||2019 Q3||69,442||69,396||Mil. Ch. 2012 USD, SAAR||Quarterly|
The ISM Report on Business® is composed of data from over 400 purchasing executives in the manufacturing sector, representing 20 industries, corresponding to their contribution to the Gross Domestic Product (GDP) in all 50 states. The report monitors activity in production, new orders, supplier deliveries, inventory, employment, prices, exports and imports. It also examines lead times and commodity information. A major feature of the report is the composite index, the Purchasing Managers’ Index (PMI).
The PMI is a composite index used only in the Manufacturing Report on Business. Prior to September 1, 2001, the acronym (PMI) stood for Purchasing Managers' Index. ISM now uses only the acronym, PMI, due to ISM's name change and concurrent move to broaden our reach into strategic supply management beyond the purchasing function. A PMI index over 50 represents growth or expansion within the manufacturing sector of the economy compared with the prior month. A reading under 50 represents contraction, and a reading at 50 indicates an equal balance between manufacturers reporting advances and declines in their business.
The ISM Report on Business is compiled monthly by ISM’s Business Survey Committee into an easily understandable, straightforward report. The diffusion index includes the percent of positive responses plus one-half of those responding the same (considered positive). The resulting single index number is then seasonally adjusted to allow for the effects of repetitive intrayear variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to nonmoveable holidays. All seasonal adjustment factors are supplied by the U.S. Department of Commerce and are subject annually to relatively minor changes when conditions warrant them.
The PMI is a composite index based on the seasonally adjusted diffusion indexes for the following five indicators at equal weights:
A diffusion index measures the degree to which a change in something is dispersed, spread out, or "diffused" in a particular group. If all members of a group of people (sample population) are asked if something has changed and in which direction, they will answer in one of three ways: it has not changed, it has increased, or it has decreased. This is the nature of the ROB questions. A diffusion index indicates the degree to which the indicated change is dispersed or diffused throughout the sample population. Respondents to ISM surveys indicate each month whether particular activities (e.g., new orders) for their organizations have increased, decreased, or remained unchanged from the previous month. The ISM indexes are calculated by taking the percentage of respondents that report that the activity has increased ("Better") and adding it to one-half of the percentage that report the activity has not changed ("Same") and adding the two percentages. Using half of the "Same" percentage effectively measures the bias toward a positive (above 50 percent) or negative index. As an example of calculating a diffusion index, if the response is 20 percent "Better," 70 percent "Same," and 10 percent "Worse," the Diffusion Index would be 55 percent (20% + [0.50 x 70%]). A reading of 50 percent indicates "no change" from the previous month.
Responses to Buying Policy reflect the percent reporting the current month's lead time, the approximate weighted number of days ahead for which commitments are made for Production Materials; Capital Expenditures; and Maintenance, Repair and Operating (MRO) Supplies, expressed as hand-to-mouth (five days), 30 days, 60 days, 90 days, six months (180 days), a year or more (360 days), and the weighted average number of days. These responses are raw data, never revised, and not seasonally adjusted since there is no significant seasonal pattern.
Starting in January 2003, the Commodity Prices Index stopped being seasonally adjusted. Starting in January 2006, the Imports Index stopped being seasonaly adjusted. Starting in January 2007, the New Export Orders Index stopped being seasonally adjusted. Starting in January 2011, the Inventories Index stopped being seasonally adjusted.
Moody's Analytics also carries the following ISM/NAPM releases: