December 2, 2013

ISM Manufacturing Index Increases From 56.4% to 57.3% in November

Filed under: Economy — Tom @ 12:23 pm

Not feeling well at all today, so this will be it until late evening or early tomorrow.

Don’t ask me how ISM’s manufacturing index increased, because I don’t know:

Economic activity in the manufacturing sector expanded in November for the sixth consecutive month, and the overall economy grew for the 54th consecutive month, say the nation’s supply executives in the latest Manufacturing ISM Report On Business®.

… “The PMI™ registered 57.3 percent, an increase of 0.9 percentage point from October’s reading of 56.4 percent. The PMI™ has increased progressively each month since June, with November’s reading reflecting the highest PMI™ in 2013. The New Orders Index increased in November by 3 percentage points to 63.6 percent, and the Production Index increased by 2 percentage points to 62.8 percent. The Employment Index registered 56.5 percent, an increase of 3.3 percentage points compared to October’s reading of 53.2 percent. This reflects the highest reading since April 2012 when the Employment Index registered 56.8 percent. With 15 of 18 manufacturing industries reporting growth in November relative to October, the positive growth trend characterizing the second half of 2013 is continuing.”

Of the 18 manufacturing industries, 15 are reporting growth in November …

The underlying numbers are stronger than the 0.9-point increase would seem to indicate. As seen above, New Orders and Production went up much more than that, and Backlog of Orders also moved up 2.5 points to 54.0%.

I’m not at all convinced that the ISM result reflects the underlying reality in U.S. manufacturing, though the whole area deserves a closer look before I go out and declare that there is really a divergence.

The index’s history shows high values in 2010. Does anyone else remember that year as a great one for manufacturing? Neither do I.



  1. Are they cooking the books again? (That’s a collective ‘they’, not meant to implicate the ISM in particular, although my comment lumps them in with the federal types that gave us low unemployment just before the 2012 elections.)

    I hope you feel better soon.

    Comment by GW — December 3, 2013 @ 3:21 pm

  2. They may be suffering the NBER delusion syndrome by viewing the data via a subjective prism. I have voiced my suspicions before and we have had that discussion.

    Comment by dscott — December 3, 2013 @ 5:16 pm

  3. Thanks, GW. Almost back at full speed.

    The ISM mfg. survey is strange, given how poorly durable goods and other items have performed. Three years ago, I looked into the fact that ISM’s exec. Director for that year was an Obama contributor, and they swore that it had no impact on the survey.

    Maybe the problem is that only companies doing decently feel like answering. The rest are so near death’s door that they can’t afford the distraction of filling out the survey.

    Comment by Tom — December 3, 2013 @ 5:18 pm

  4. [...] ISM Manufacturing — up from October, strong expansion (57.3%). [...]

    Pingback by BizzyBlog — December 6, 2013 @ 7:21 am

  5. [...] been several rounds of good economic news, from ADP’s 215,000 private-sector jobs added to a strong ISM manufacturing index of 57.3. Gallup’s measure of adult unemployment, an increase to a seasonally-unadjusted 8.2% from [...]

    Pingback by November jobs report – 203,000 jobs added, unemployment rate 7.0% « Hot Air — December 6, 2013 @ 9:41 am

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