ISM® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making. Survey respondents are asked whether activities in their organizations are increasing, decreasing, or stagnant. The activities include new orders, production, employment, supplier deliveries, inventories, customers’ inventories, commodity prices, order backlog, new export orders, and imports.

1. The ISM Manufacturing Index is published at the beginning of each month at 10 a.m.
2. The 2.3% increase in manufacturing productivity in Q4 reflects that recent trend but masked a decline of 0.8% for the year, suggesting that there’s still potentially some room to increase output without adding workers.
3. If demand is high, leading to lower inventory levels, it can be a leading economic indicator as to the health of consumer spending in the economy.
4. As such, it is widely followed by economists, analysts, government, business leaders, and supply management professionals.
5. An index of more than 50 indicates an expansion in the manufacturing segment of the economy in comparison with the previous month while a reading of 50 indicates no change and a reading below 50 suggests a contraction of the manufacturing sector.

Just 11% of respondents reported adding to their payrolls in January, compared with 18.4% that indicated that they made cuts. A Services PMI® above 49.9 percent, over time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 49.9 percent, it is generally declining. The distance from 50 percent or 49.9 percent is indicative of the strength of the expansion or decline.

ISM Non-Manufacturing Index: Meaning and Types

Inventory SentimentThe ISM® Services Inventory Sentiment Index grew for the eighth consecutive month in December after one month of contraction in April, preceded by four consecutive months of growth and four months of contraction from August to November 2022. The index registered 55.3 percent, a 6.9-percentage point decrease from November’s figure of 62.2 percent. This reading indicates that respondents feel their inventories are too high when correlated to business activity levels. The New Export gci financial review Orders Index registered 50.4 percent, a 3.2-percentage point decrease from the 53.6 percent reported in November. Of the total respondents in December, 71 percent indicated they do not perform, or do not separately measure, orders for work outside of the U.S. Orders and requests for services and other non-manufacturing activities to be provided outside of the U.S. by domestically based companies contracted in November for the second consecutive month after an eight-month period of growth.

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If there are more jobs than applicants, it can indicate a healthy, growing economy. New orders include new sales that were recorded for the month and whether businesses have seen increases or decreases in demand for their services versus prior months. For example, retailers might report a high demand for their services at year-end due to the holiday season.

Financial Services & Investing

A reading above 50 percent indicates the services sector economy is generally expanding; below 50 percent indicates the services sector is generally contracting. The ISM® Services Inventory Sentiment Index contracted in November for the fourth straight month and the 18th time in the last 20 months. The index registered 44.2 percent, a 2.2-percentage point decrease from October’s figure of 46.4 percent.

About This ReportDO NOT CONFUSE THIS NATIONAL REPORT with the various regional purchasing reports released across the country. The national report’s information reflects the entire U.S., while the regional reports contain primarily regional data from their local vicinities. Also, the information in the regional reports is not used in calculating the results of the national report. A Services PMI® above 50.1 percent, over time, indicates that the overall economy, or gross domestic product (GDP), is generally expanding; below 50.1 percent, it is generally declining. The distance from 50 percent or 50.1 percent is indicative of the strength of the expansion or decline.

The Institute for Supply Management’s monthly Manufacturing PMI Report on Business outlines directional trends for several manufacturing indexes. This report details month-over-month changes in growth or contraction in addition to reporting how long each index has been moving in its current direction. The https://traderoom.info/ ISM Manufacturing Index is useful in understanding the direction of economic activity from the lens of the country’s primary manufacturing companies. When the business activity index is increasing, investors might infer that the stock markets should increase because of higher expected corporate profits.

Market Data

Increasing material costs may indicate that the disinflationary benefit of weaker goods demand could be waning — a factor for the Fed to consider as policymakers contemplate the timing of interest rate cuts. Stronger order volume, if sustained, should provide a bit of a lift to hiring, but for now at least, manufacturers appear to be able to absorb that modest uptick in demand with their existing workforce. The 2.3% increase in manufacturing productivity in Q4 reflects that recent trend but masked a decline of 0.8% for the year, suggesting that there’s still potentially some room to increase output without adding workers.

These two indexes are published monthly by the ISM Manufacturing and Services business survey committees. The Institute of Supply Management (ISM) Non-Manufacturing Index is an economic index based on surveys of more than 400 non-manufacturing (or services) firms’ purchasing and supply executives. The ISM services survey is part of the ISM Report On Business—Manufacturing (PMI) and Services (PMI).

This reading indicates that respondents feel their inventories are too low when correlated to business activity levels. The ISM Services report also shows which service industries reported an increase in prices paid for various raw materials and goods. The price paid could also include services that companies needed, such as software services.

TEMPE, Ariz., Dec. 5, 2022 /PRNewswire/ — Economic activity in the services sector grew in November for the 30th month in a row — with the Services PMI® registering 56.5 percent — say the nation’s purchasing and supply executives in the latest Services ISM® Report On Business®. The ISM Report on Business contains three separate purchasing managers indexes based on surveys. In addition to the manufacturing PMI, the ISM produces a services PMI, for the non-manufacturing sector, which is released on the third business day of the month.

As noted above, it is the largest organization that serves members of the supply management and the purchasing industries. The ISM Manufacturing Index topped expectations in January, rising to 49.1 from a revised 47.1 in December. A reading above 50 is indicative of expansion in the manufacturing sector, while a reading below 50 is consistent with contraction. That was the strongest reading for the index since it first slipped into contractionary territory in November 2022 and stood in contrast to weaker readings from recent regional manufacturing surveys. As a result, the interpretation of an ISM Manufacturing Index of 58 would be that economic activity in the manufacturing sector in the United States expanded compared to the prior month.

The New Export Orders Index registered 38.4 percent, its lowest reading since April 2020 (36.3 percent) and a 9.3-percentage point decrease from the 47.7 percent reported in October. Of the total respondents in November, 78 percent indicated they do not perform, or do not separately measure, orders for work outside of the U.S. Services PMI®In September, the Services PMI® registered 56.7 percent, a 0.2-percentage point decrease compared to the August reading of 56.9 percent. The 12-month average is 59.2 percent, reflecting consistently strong growth in the services sector, which has expanded for 28 consecutive months.