ISM Makes Annual Adjustments to Seasonal Factors for ISM Manufacturing PMI® and Diffusion Indexes and ISM Non-Manufacturing NMI® and Diffusion Indexes

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Jan 29, 2015, 10:00 ET

TEMPE, Ariz., Jan. 29, 2015 /PRNewswire/ -- Based on input from an independent expert, Institute for Supply Management^® recently announced the completion of its annual adjustments to the seasonal factors used in the monthly Institute for Supply Management^® (ISM) Manufacturing Report On Business^® and the monthly Institute for Supply Management^® (ISM) Non-Manufacturing Report On Business^®. Economists and managers who track these indexes will note that changes are effective with the January 2015 ISM Manufacturing Report On Business^®, which is scheduled to be released on February 2, 2015, and the January 2015 ISM Non-Manufacturing Report On Business^®, which will be released on February 4, 2015.

Seasonal adjustment factors are used to allow for the effects of repetitive intra-year variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to non-movable holidays. It is standard practice to project the seasonal adjustment factors used to calculate the indexes one year ahead (2015).

As in previous years, the X-13-ARIMA program was used to develop the revisions to the Manufacturing and Non-Manufacturing indexes for 2011 through 2014, as well as the 2015 projected seasonal factors. The 2015 seasonal factors will be recomputed when the actual data are known in early 2016. Projected seasonal factors for 2015 and revised seasonally adjusted indexes are shown below.

2015 Seasonal Adjustment Factors for ISM Manufacturing Indexes

		New Orders	Production	Employment	Supplier Deliveries

Jan	2015	1.012	0.964	0.970	1.020
Feb	2015	1.058	1.034	1.012	1.003
Mar	2015	1.081	1.060	1.020	1.029
Apr	2015	1.103	1.108	1.077	1.037
May	2015	1.030	1.065	1.045	1.006
Jun	2015	0.973	0.990	1.009	0.994
Jul	2015	0.930	0.955	1.015	1.023
Aug	2015	0.977	0.979	0.987	0.996
Sep	2015	0.968	0.974	0.970	0.997
Oct	2015	0.955	0.964	0.967	0.972
Nov	2015	0.992	0.985	0.964	0.949
Dec	2015	0.924	0.924	0.966	0.975

To compute the PMI®:

1) Calculate the unadjusted diffusion index for New Orders, Production, Employment and Supplier Deliveries to two decimal places (percent higher or slower plus one half of the percent same or unchanged). For Inventories, it will be percent higher plus one half of the percent same or unchanged.

2) Divide each unadjusted diffusion index by its seasonal factor (round to one decimal place).

3) Add all five index numbers together and divide by five.

To compute other indexes, follow steps #1 and #2 above for each indicator.

2015 Seasonal Adjustment Factors for ISM Non-Manufacturing Indexes

		Business Activity	New Orders	Employment	Prices

Jan	2015	0.935	0.941	0.949	1.032
Feb	2015	0.993	1.015	1.002	1.047
Mar	2015	1.070	1.046	1.034	1.068
Apr	2015	1.063	1.039	1.050	1.047
May	2015	1.050	1.053	1.058	1.010
Jun	2015	0.976	1.003	1.082	1.018
Jul	2015	1.002	0.987	1.032	1.006
Aug	2015	0.994	0.978	0.991	0.975
Sep	2015	0.997	1.015	0.935	0.971
Oct	2015	0.960	0.951	0.955	0.958
Nov	2015	0.988	1.017	0.927	0.925
Dec	2015	0.971	0.953	0.988	0.945

To compute the NMI®:

1) Calculate the unadjusted diffusion index for Business Activity, New Orders and Employment to two decimal places (percent higher or up plus one half of the percent same or unchanged). For Supplier Deliveries, it will be percent slower plus one half of the percent same or unchanged.

2) Divide each unadjusted diffusion index by its seasonal factor (round to one decimal place).

3) Add all four index numbers together and divide by four.

To compute other indexes, follow steps #1 and #2 above for each indicator.

Revised Manufacturing Seasonally Adjusted Indexes 2011-2014

		PMI®	New Orders	Production	Employment	Supplier Deliveries

Jan	2011	59.1	62.1	63.7	60.7	57.0
Feb	2011	59.6	61.9	64.9	61.6	58.9
Mar	2011	59.2	61.7	63.9	60.9	60.3
Apr	2011	59.3	62.1	61.3	59.7	58.9
May	2011	53.9	53.9	53.4	57.5	56.0
Jun	2011	56.9	55.9	57.4	61.0	56.6
Jul	2011	52.7	54.4	54.4	55.3	51.5
Aug	2011	52.8	51.3	51.5	54.6	52.1
Sep	2011	52.7	51.3	53.3	54.7	52.2
Oct	2011	51.4	51.2	52.1	54.9	52.1
Nov	2011	51.7	54.0	53.7	52.9	51.2
Dec	2011	52.8	55.3	58.8	54.7	49.7

Jan	2012	52.9	55.2	55.2	54.2	50.4
Feb	2012	53.1	55.9	58.1	53.9	48.1
Mar	2012	53.3	55.9	56.8	55.1	48.7
Apr	2012	54.2	57.3	60.1	56.4	48.5
May	2012	53.4	58.9	55.1	56.5	50.4
Jun	2012	51.3	51.5	53.9	56.7	50.4
Jul	2012	50.1	49.2	50.5	52.1	49.7
Aug	2012	50.7	48.4	49.1	52.5	50.5
Sep	2012	51.9	53.0	51.1	54.1	50.9
Oct	2012	50.7	50.2	50.9	52.9	49.5
Nov	2012	48.9	49.5	51.2	48.6	50.2
Dec	2012	50.0	50.3	51.9	52.2	52.5

Jan	2013	52.6	51.6	54.8	54.2	51.5
Feb	2013	54.1	57.0	58.3	52.7	51.1
Mar	2013	52.0	52.7	54.6	52.8	50.2
Apr	2013	50.3	50.6	53.2	50.4	50.8
May	2013	50.1	51.1	50.8	49.5	50.0
Jun	2013	52.8	55.9	55.6	50.8	51.1
Jul	2013	54.4	58.0	60.7	54.0	52.2
Aug	2013	55.6	61.5	62.0	54.5	52.7
Sep	2013	55.6	60.7	59.7	54.6	53.1
Oct	2013	55.8	58.9	59.2	54.1	54.2
Nov	2013	56.0	60.2	60.9	55.3	53.3
Dec	2013	56.1	64.9	60.4	55.2	53.1

Jan	2014	51.8	52.8	56.0	52.6	53.8
Feb	2014	54.3	56.1	52.1	52.8	57.9
Mar	2014	54.4	56.4	57.3	51.9	53.8
Apr	2014	55.3	56.2	57.1	54.7	55.4
May	2014	55.6	58.7	59.0	53.5	53.6
Jun	2014	55.7	59.1	59.9	53.9	52.7
Jul	2014	56.4	62.0	60.9	56.3	54.3
Aug	2014	58.1	63.9	63.1	57.4	54.2
Sep	2014	56.1	59.4	62.4	54.6	52.6
Oct	2014	57.9	63.0	62.8	55.2	56.1
Nov	2014	57.6	62.1	62.6	54.6	57.0
Dec	2014	55.1	57.8	57.7	56.0	58.6

The revised breakeven point for the overall economy is a PMI® of 43.1 percent. A PMI® over 43.1 percent indicates an expanding overall economy. A PMI® below 43.1 percent indicates the overall economy is declining. The ISM Manufacturing Inventories Index is no longer seasonally adjusted as of January 2012.

Revised Non-Manufacturing Seasonally Adjusted Indexes 2011-2014

		NMI®	Business Activity	New Orders	Employment	Prices

Jan	2011	57.2	61.5	61.7	51.9	70.2
Feb	2011	57.2	63.4	59.5	53.9	70.6
Mar	2011	55.8	58.6	60.0	53.0	70.5
Apr	2011	55.4	57.1	57.5	53.9	71.1
May	2011	55.0	54.8	56.3	54.7	70.3
Jun	2011	54.4	56.6	55.8	53.0	62.3
Jul	2011	53.7	56.5	54.2	53.5	60.4
Aug	2011	53.7	56.0	54.4	51.5	60.8
Sep	2011	52.5	56.1	54.9	49.3	61.3
Oct	2011	52.8	54.1	53.3	51.9	58.4
Nov	2011	53.0	55.8	53.4	52.9	63.5
Dec	2011	52.6	55.9	54.1	48.8	62.0

Jan	2012	55.8	58.8	58.5	54.7	61.5
Feb	2012	55.5	60.4	58.2	53.8	66.8
Mar	2012	55.5	59.1	58.1	55.3	64.8
Apr	2012	54.6	55.9	55.8	55.0	56.5
May	2012	54.3	56.0	55.9	52.4	53.0
Jun	2012	53.5	54.7	55.5	52.6	49.8
Jul	2012	52.5	55.4	54.8	50.4	54.9
Aug	2012	53.2	54.5	54.1	52.8	61.7
Sep	2012	54.9	59.2	55.9	52.8	66.1
Oct	2012	54.4	56.7	55.6	53.9	62.0
Nov	2012	54.9	60.3	57.0	53.3	58.2
Dec	2012	55.8	60.7	59.1	54.8	56.4

Jan	2013	55.1	56.6	56.0	55.3	57.1
Feb	2013	55.7	57.2	57.6	56.3	60.3
Mar	2013	55.0	57.3	56.4	53.2	56.1
Apr	2013	53.9	55.6	55.8	53.3	52.5
May	2013	53.9	56.4	56.2	51.0	53.3
Jun	2013	53.7	54.7	53.5	55.0	55.3
Jul	2013	55.3	58.3	56.3	54.0	57.5
Aug	2013	57.1	59.7	58.3	55.7	53.1
Sep	2013	54.0	54.8	57.6	53.5	56.9
Oct	2013	55.0	59.6	56.5	54.9	56.9
Nov	2013	53.8	54.5	55.2	54.3	53.3
Dec	2013	53.1	55.3	50.5	55.2	55.2

Jan	2014	54.3	56.6	52.2	56.0	57.0
Feb	2014	52.5	55.7	53.0	48.4	56.0
Mar	2014	53.7	54.2	54.8	53.7	58.1
Apr	2014	55.3	60.3	58.3	52.2	60.4
May	2014	56.1	61.1	59.9	53.2	60.2
Jun	2014	56.3	59.2	60.4	54.5	60.1
Jul	2014	57.9	61.3	62.6	56.1	60.0
Aug	2014	58.6	63.1	62.1	56.6	57.3
Sep	2014	58.1	62.0	60.5	57.8	55.2
Oct	2014	56.9	60.5	59.3	58.3	52.8
Nov	2014	58.8	63.4	61.0	56.3	55.0
Dec	2014	56.5	58.6	59.2	55.7	49.8

The ISM Report On Business® is considered by many economists to be the most reliable near-term economic barometer available. It is reviewed regularly by top government agencies and economic and business leaders for its timely, accurate information. The Manufacturing and Non-Manufacturing ISM Report On Business® is published monthly by the Institute for Supply Management®. Each month, both reports are compiled from responses to questions asked of purchasing and supply executives across the country and reflects change, if any, in the current month compared to previous months. Institute for Supply Management® (ISM) is the first supply management institute in the world. Founded in 1915, ISM's mission is to enhance the value and performance of procurement and supply chain management practitioners and their organizations worldwide. By executing and extending its mission through education, research, standards of excellence and information dissemination — including the renowned monthly ISM Report On Business® — ISM maintains a strong global influence among individuals and organizations.