2008 U.S. Department Of Commerce Annual Adjustments to Seasonal Factors

FOR RELEASE: January 29, 2008

Contact: Rose Marie Goupil
  ISM, Media Relations
  Tempe, Arizona
  800/888-6276, Ext. 3015
  E-mail: rgoupil@ism.ws

U.S. Department Of Commerce Makes Annual Adjustments
to Seasonal Factors for ISM Manufacturing PMI and Diffusion Indexes
and ISM Non-Manufacturing Diffusion Indexes

(Tempe, Arizona) — The U.S. Department of Commerce recently completed its annual adjustment 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 these changes are effective with the January 2008 ISM Manufacturing Report On Business®, which is scheduled to be released on February 1, 2008, and the January 2008 ISM Non-Manufacturing Report On Business®, which will be released on February 5, 2008.

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 a year ahead (2008).

The X12-ARIMA program was used to develop the revisions to the indexes for 2004 through 2007 as well as the 2008 projected seasonal factors for Manufacturing. For the Non-Manufacturing Report, these indexes have been revised from 2004 through 2007 also. The 2008 seasonal factors will be recomputed when the actual data are known in early 2009. Projected seasonal factors for 2008 and revised seasonally adjusted indexes are shown below, followed by charts tracking both the former and the revised PMI and Business Activity Index for Non-Manufacturing.




2008 Seasonal Adjustment Factors for ISM Manufacturing Indexes

(Prepared by G. McKittrick, Economist, U.S. Department of Commerce, 202/482-2343)

  New
Orders

Production

Employment
Supplier
Deliveries

Inventories
January 2008 0.939 0.933 0.956 0.976 0.998
February 2008 1.039 1.006 1.021 0.988 1.035
March 2008 1.076 1.027 1.016 0.999 1.035
April 2008 1.076 1.079 1.057 1.000 1.018
May 2008 1.027 1.044 1.067 1.014 0.999
June 2008 1.048 1.010 1.042 1.008 0.977
July 2008 1.001 0.983 0.993 1.017 0.977
August 2008 0.973 0.989 0.976 1.014 1.025
September 2008 1.017 1.066 0.970 1.009 0.991
October 2008 0.948 0.954 0.967 0.995 0.983
November 2008 0.949 0.984 0.979 0.992 0.984
December 2008 0.904 0.922 0.954 0.990 0.979
           
Weight .20 .20 .20 .20 .20


To compute the PMI:

  1. Calculate the unadjusted diffusion index for New Orders, Production, Employment, and Inventories 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 five index numbers together and divide by five.

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


2008 Seasonal Adjustment Factors for ISM Non-Manufacturing Indexes

  Business
Activity
New
Orders

Employment

Prices
January 2008 0.908 0.942 0.934 0.962
February 2008 0.974 0.988 0.971 1.001
March 2008 1.054 1.015 1.002 1.066
April 2008 1.091 1.087 1.033 1.095
May 2008 1.064 1.063 1.067 1.065
June 2008 1.082 1.059 1.073 1.006
July 2008 0.997 1.003 1.041 1.002
August 2008 0.959 0.996 0.969 0.947
September 2008 0.950 0.954 0.972 0.986
October 2008 0.985 0.978 0.952 0.955
November 2008 0.999 0.988 0.990 0.971
December 2008 0.934 0.927 0.995 0.944


On January 18, 2008, ISM announced a revision in the formula for calculating the PMI (composite index for the manufacturing sector). The new formula for the PMI includes the same five indexes as the past formula (New Orders, Production, Employment, Supplier Deliveries and Inventories) but at equal weights, instead of the previous weighted formula. The new formula more closely predicts the gross domestic product (GDP) for the past several years. As a result, the PMI index numbers have been revised back through 2001. The PMI numbers prior to 2001 will not be revised. The following information includes the revised PMI numbers.

Revised PMI Manufacturing Seasonally Adjusted Indexes 2001-2003

  PMI
2001
PMI
2002
PMI
2003
January 42.3 47.5 51.3
February 42.1 50.7 48.8
March 43.1 52.4 46.3
April 42.7 52.4 46.1
May 41.3 53.1 49.0
June 43.2 53.6 49.0
July 43.5 50.2 51.0
August 46.3 50.3 53.2
September 46.2 50.5 52.4
October 40.8 49.0 55.2
November 44.1 48.5 58.4
December 45.3 51.6 60.1


Revised Manufacturing Seasonally Adjusted Indexes 2004-2007

 
PMI
New
Orders

Production

Employment
Supplier
Deliveries

Inventories
Jan 2004 60.8 70.6 69.3 54.7 61.5 47.9
Feb 2004 59.9 66.5 65.6 55.7 62.9 49.0
Mar 2004 60.6 64.6 66.8 57.0 66.7 48.0
Apr 2004 60.6 67.1 66.6 57.2 66.7 45.2
May 2004 61.4 64.5 65.3 60.1 68.3 48.8
Jun 2004 60.5 60.9 63.7 59.4 67.1 51.3
Jul 2004 59.9 62.8 63.8 57.4 64.5 50.8
Aug 2004 58.5 62.1 59.3 56.4 62.8 52.1
Sep 2004 57.4 57.7 59.8 58.0 59.8 51.6
Oct 2004 56.3 58.4 59.3 55.5 59.2 49.3
Nov 2004 56.2 60.1 57.3 56.9 56.8 49.7
Dec 2004 57.2 66.3 57.9 53.8 55.3 52.8
             
Jan 2005 56.6 58.2 58.9 58.9 53.9 52.9
Feb 2005 54.4 55.5 57.7 55.8 54.2 48.7
Mar 2005 54.8 56.6 57.6 53.4 52.9 53.3
Apr 2005 52.5 54.7 56.4 51.5 51.8 48.0
May 2005 51.0 52.5 55.1 48.4 51.1 48.1
Jun 2005 52.9 55.9 56.2 50.7 53.3 48.5
Jul 2005 54.3 59.2 59.2 53.7 52.3 47.2
Aug 2005 51.9 56.0 54.4 52.8 50.5 45.8
Sep 2005 56.6 61.0 60.5 53.3 58.6 49.7
Oct 2005 57.3 60.4 61.9 54.9 61.3 48.1
Nov 2005 56.3 59.3 60.6 56.1 57.0 48.4
Dec 2005 54.4 59.5 59.0 53.7 52.4 47.2
             
Jan 2006 54.8 59.7 59.1 53.1 54.9 47.1
Feb 2006 55.0 61.1 58.2 53.5 52.4 50.0
Mar 2006 54.3 57.9 58.4 53.1 53.6 48.3
Apr 2006 55.9 57.4 59.3 54.5 57.4 51.0
May 2006 53.8 54.3 56.5 52.3 57.6 48.4
Jun 2006 52.7 56.1 54.8 49.2 55.3 48.2
Jul 2006 53.4 55.1 56.1 51.2 55.2 49.5
Aug 2006 53.5 54.2 54.5 53.7 55.1 49.9
Sep 2006 51.9 54.3 54.5 49.5 53.8 47.2
Oct 2006 51.1 52.4 53.0 50.5 50.7 48.8
Nov 2006 49.7 49.5 48.8 49.3 52.6 48.5
Dec 2006 51.5 52.9 53.5 50.1 52.7 48.4
             
Jan 2007 49.3 52.4 51.5 50.1 52.3 40.4
Feb 2007 51.5 55.4 54.6 50.9 51.1 45.3
Mar 2007 50.7 51.5 54.0 49.2 51.4 47.3
Apr 2007 52.8 58.1 56.7 52.3 50.4 46.4
May 2007 52.8 58.6 57.2 51.4 50.7 46.1
Jun 2007 53.4 58.5 62.0 50.8 50.0 45.8
Jul 2007 52.3 56.9 54.9 50.3 51.7 47.7
Aug 2007 51.2 54.5 54.8 50.9 50.3 45.4
Sep 2007 50.5 53.6 54.1 51.5 51.7 41.7
Oct 2007 50.4 52.8 50.1 51.8 50.7 46.5
Nov 2007 50.0 52.5 51.3 48.4 51.5 46.4
Dec 2007 48.4 46.9 48.6 48.7 52.6 45.4

The revised breakeven point for the overall economy is a PMI of 41.1 percent. A PMI over 41.1 percent indicates an expanding overall economy. A PMI below 41.1 percent indicates the overall economy is declining.


Revised Non-Manufacturing Seasonally Adjusted Indexes 2004-2007

  Business
Activity
New
Orders

Employment

Prices
Jan 2004 67.7 65.4 55.1 62.2
Feb 2004 62.5 61.2 52.9 59.5
Mar 2004 62.3 62.1 53.8 65.0
Apr 2004 64.0 61.6 54.7 68.6
May 2004 62.6 60.7 54.5 71.0
Jun 2004 59.2 62.1 55.6 74.2
Jul 2004 63.2 63.2 49.7 71.9
Aug 2004 59.7 59.0 53.5 70.9
Sep 2004 60.0 60.6 55.3 67.0
Oct 2004 61.0 61.7 56.5 72.8
Nov 2004 62.8 61.1 54.8 70.6
Dec 2004 65.0 63.2 54.7 71.3
         
Jan 2005 62.2 61.8 53.8 68.5
Feb 2005 61.6 62.6 58.9 69.0
Mar 2005 61.4 61.7 57.1 66.0
Apr 2005 58.5 57.2 53.6 63.7
May 2005 57.5 58.5 52.2 57.1
Jun 2005 60.4 59.1 55.7 60.7
Jul 2005 60.9 61.8 55.6 69.1
Aug 2005 65.3 64.6 60.6 68.1
Sep 2005 55.6 57.6 55.8 79.3
Oct 2005 59.4 57.9 54.1 76.9
Nov 2005 59.1 59.9 57.1 70.9
Dec 2005 60.7 63.8 56.5 66.8
         
Jan 2006 58.2 57.1 52.9 68.9
Feb 2006 61.2 57.2 57.3 67.0
Mar 2006 60.1 59.7 54.7 60.7
Apr 2006 61.2 60.9 56.9 69.8
May 2006 58.2 58.6 55.7 70.8
Jun 2006 56.1 56.8 51.3 72.6
Jul 2006 55.6 56.2 54.2 74.1
Aug 2006 57.4 52.3 52.6 73.7
Sep 2006 55.3 58.1 53.1 57.4
Oct 2006 57.2 55.6 52.2 54.3
Nov 2006 58.6 57.0 52.2 55.3
Dec 2006 57.0 56.0 52.9 58.8
         
Jan 2007 57.9 55.6 52.9 56.1
Feb 2007 54.9 55.2 52.1 53.9
Mar 2007 53.0 54.2 51.3 62.9
Apr 2007 56.0 54.7 51.9 63.2
May 2007 58.4 56.7 53.5 64.3
Jun 2007 59.7 56.7 53.5 65.6
Jul 2007 55.9 53.1 51.9 63.1
Aug 2007 56.3 55.8 48.6 60.1
Sep 2007 55.7 53.9 52.5 65.0
Oct 2007 55.5 55.4 52.4 66.1
Nov 2007 54.6 52.0 51.4 73.7
Dec 2007 54.4 53.9 51.8 71.5


Charts Illustrating Former and Revised Indexes

2008 Manufacturing PMI Chart Illustrating Former and Revised Indexes

2008 Non-Manufacturing Business Activity Chart Illustrating Former and Revised Indexes

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 Reports On Business® are 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. As the oldest and largest supply management institute in the world, the mission of the Institute for Supply Management™ (ISM) is to lead supply management. By executing and extending its mission through education, research, standards of excellence, influence building and information dissemination — including the renowned monthly ISM Report On Business® report — ISM continues to extend the global impact of supply management. ISM's membership base includes more than 40,000 supply management professionals in 75 countries. Supply management professionals are responsible for trillions of dollars in the purchases of products and services annually. ISM is a member of the International Federation of Purchasing and Supply Management (IFPSM).


Back to Top