ISM Manufacturing Survey (PMI)

The ISM Manufacturing Survey, also known as the Purchasing Managers’ Index (PMI), is a widely recognized economic indicator that provides insights into the health of the manufacturing sector in the United States. It is published by the Institute for Supply Management (ISM) on a monthly basis.

The PMI is based on a survey conducted among purchasing managers in the manufacturing industry. These managers are responsible for making purchasing decisions on behalf of their companies. The survey collects data on various economic factors such as new orders, production levels, employment, supplier deliveries, and inventories.

The survey results are compiled into an index, which is released as the PMI. The index is calculated using a diffusion index methodology. A reading above 50 indicates expansion in the manufacturing sector, while a reading below 50 suggests contraction. Additionally, the magnitude of the index movement indicates the pace of growth or contraction. For example, a higher PMI value above 50 indicates faster growth.

The ISM Manufacturing Survey provides valuable information about the overall health and trends in the manufacturing sector. It is closely watched by economists, investors, and business professionals as it can offer insights into the direction of the broader economy. A strong PMI reading suggests economic expansion, increased production, and potential job growth, while a weak PMI reading indicates economic contraction and potential job losses.

In addition to the headline PMI number, the ISM Manufacturing Survey also provides sub-indices that measure specific aspects of the manufacturing sector, such as new orders, production, employment, supplier deliveries, and inventories. These sub-indices provide a more detailed picture of the sector’s performance.

Overall, the ISM Manufacturing Survey (PMI) is an important economic indicator that provides insights into the health and trends of the manufacturing sector in the United States. It is used by analysts and decision-makers to assess economic conditions, anticipate changes, and make informed business and investment decisions.