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 24, 2017, 09:00 ET

TEMPE, Ariz., Jan. 24, 2017 /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 2017 ISM^® Manufacturing Report On Business^®, which is scheduled to be released on February 1, 2017, and the January 2017 ISM^® Non-Manufacturing Report On Business^®, which will be released on February 3, 2017.

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 (2017).

As in previous years, the X-13-ARIMA program was used to develop the revisions to the Manufacturing and Non-Manufacturing indexes for 2010 through 2016, as well as the 2017 projected seasonal factors. The 2017 seasonal factors will be recomputed when the actual data are known in early 2018. Projected seasonal factors for 2017 are shown below.

2017 Seasonal Adjustment Factors for ISM^® Manufacturing Indexes

	New Orders	Production	Employment	Supplier Deliveries
JAN 17	0.961	0.929	0.963	1.007
FEB 17	1.014	1.009	0.996	1.012
MAR 17	1.047	1.050	0.985	1.010
APR 17	1.104	1.118	1.067	1.026
MAY 17	1.050	1.042	1.037	1.017
JUN 17	1.024	1.017	1.023	0.983
JUL 17	1.001	0.990	1.033	1.011
AUG 17	0.979	0.983	0.994	0.998
SEP 17	0.975	0.972	0.970	0.994
OCT 17	0.962	0.976	0.986	0.986
NOV 17	0.953	0.978	0.972	0.974
DEC 17	0.930	0.934	0.974	0.984

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.

2017 Seasonal Adjustment Factors for ISM Non-Manufacturing Indexes

	Business Activity	New Orders	Employment	Prices
JAN 17	0.929	0.921	0.924	0.958
FEB 17	0.967	0.964	0.978	1.006
MAR 17	1.035	1.018	1.018	1.046
APR 17	1.074	1.052	1.051	1.050
MAY 17	1.022	1.039	1.020	1.077
JUN 17	1.004	1.025	1.076	1.056
JUL 17	1.038	1.043	1.044	1.033
AUG 17	1.009	0.990	0.978	0.976
SEP 17	1.004	1.023	0.968	0.958
OCT 17	0.972	0.972	0.982	0.957
NOV 17	0.986	0.997	0.968	0.948
DEC 17	0.960	0.957	0.995	0.937

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.

About ISM Report On Business^®
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 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.

About Institute for Supply Management^®
Institute for Supply Management^® (ISM^®) serves supply management professionals in more than 90 countries. Its 48,000 members around the world manage about $1 trillion in corporate and government supply chain procurement annually. Founded in 1915 as the first supply management institute in the world, ISM^® is committed to advancing the practice of supply management to drive value and competitive advantage for its members, contributing to a prosperous and sustainable world. ISM^® leads the profession through the ISM^® Report On Business^®, its highly regarded certification programs and the newly launched ISM^® Mastery Model™. This report has been issued by the association since 1931, except for a four-year interruption during World War II.

For the full release, please contact Kristina Cahill [email protected]