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

FOR RELEASE: January 21, 2009

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


(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 2009 ISM Manufacturing Report On Business®, which is scheduled to be released on February 2, 2009, and the January 2009 ISM Non-Manufacturing Report On Business®, which will be released on February 4, 2009.

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 (2009).

The X12-ARIMA program was used to develop the revisions to the indexes for 2005 through 2008 as well as the 2009 projected seasonal factors for Manufacturing. For the Non-Manufacturing Report, these indexes have been revised from 2005 through 2008 also. The 2009 seasonal factors will be recomputed when the actual data are known in early 2010. Projected seasonal factors for 2009 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.




2009 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 2009 0.949 0.919 0.937 0.972 1.014
February 2009 1.043 0.993 0.996 0.964 1.026
March 2009 1.057 1.004 1.014 0.997 1.024
April 2009 1.081 1.078 1.047 1.002 1.027
May 2009 1.057 1.065 1.049 1.025 1.002
June 2009 1.056 1.048 1.033 1.017 1.007
July 2009 1.003 1.002 1.009 1.039 0.970
August 2009 0.978 1.009 1.013 1.007 1.048
September 2009 1.004 1.059 0.995 1.025 0.976
October 2009 0.940 0.963 0.979 0.993 0.991
November 2009 0.945 0.969 0.975 0.988 0.957
December 2009 0.885 0.890 0.952 0.971 0.957

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.


2009 Seasonal Adjustment Factors for ISM Non-Manufacturing Indexes

  Business
Activity
New
Orders

Employment

Prices
January 2009 0.916 0.926 0.944 0.954
February 2009 0.970 0.970 0.965 0.966
March 2009 1.042 1.004 0.991 1.062
April 2009 1.084 1.086 1.053 1.099
May 2009 1.085 1.093 1.078 1.088
June 2009 1.064 1.060 1.038 1.042
July 2009 0.987 0.998 1.048 1.030
August 2009 0.975 1.002 0.966 0.927
September 2009 0.962 0.959 0.971 0.974
October 2009 0.978 0.971 0.948 0.952
November 2009 0.987 0.980 0.997 0.960
December 2009 0.950 0.950 1.001 0.946

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 2005-2008

  PMI New
Orders
Production Employment Supplier
Deliveries
Inventories
Jan 2005 56.6 58.2 59.1 58.7 54.1 52.7
Feb 2005 54.8 55.8 58.2 56.0 54.7 49.1
Mar 2005 54.9 57.3 57.4 53.6 53.1 53.2
Apr 2005 52.5 54.8 56.4 51.8 51.7 47.8
May 2005 51.0 52.1 54.7 49.0 50.8 48.2
Jun 2005 52.6 55.6 55.3 51.0 53.1 48.2
Jul 2005 54.0 58.7 58.8 53.3 52.0 47.0
Aug 2005 51.6 55.8 54.3 51.8 50.5 45.5
Sep 2005 56.5 61.0 60.2 53.0 58.2 50.2
Oct 2005 57.2 60.6 61.9 54.3 61.2 48.1
Nov 2005 56.5 59.6 61.0 56.0 57.1 48.6
Dec 2005 54.9 60.2 60.3 53.8 52.7 47.5
 
Jan 2006 54.8 59.4 59.3 53.3 55.2 46.7
Feb 2006 55.4 61.1 58.6 54.0 53.1 50.4
Mar 2006 54.5 58.4 58.5 53.3 53.8 48.4
Apr 2006 56.0 57.5 59.5 54.9 57.2 50.7
May 2006 53.6 53.5 55.8 53.0 57.2 48.4
Jun 2006 52.3 55.7 53.6 49.6 55.0 47.5
Jul 2006 53.0 54.8 55.7 50.6 54.7 49.4
Aug 2006 53.0 54.1 54.3 52.3 55.1 49.4
Sep 2006 51.8 54.5 54.5 49.0 53.4 47.8
Oct 2006 51.0 52.7 52.8 49.9 50.8 48.6
Nov 2006 50.0 49.8 49.2 49.3 52.8 49.1
Dec 2006 52.2 53.8 54.8 50.1 53.3 49.0
 
Jan 2007 49.4 51.9 51.7 50.7 52.6 39.9
Feb 2007 51.9 55.2 55.1 51.7 52.0 45.7
Mar 2007 51.1 52.1 54.7 49.3 51.6 47.6
Apr 2007 52.8 58.2 56.8 52.7 50.2 46.0
May 2007 52.5 57.6 56.4 52.3 50.2 46.0
Jun 2007 52.9 58.2 60.4 51.4 49.6 44.9
Jul 2007 51.9 56.8 54.2 49.6 51.0 48.0
Aug 2007 50.6 54.4 54.2 49.3 50.4 44.7
Sep 2007 50.5 54.0 54.3 50.7 51.0 42.3
Oct 2007 50.2 53.2 49.7 51.3 50.8 46.2
Nov 2007 50.4 52.8 51.9 48.4 51.7 47.3
Dec 2007 49.1 47.6 49.9 48.7 53.4 46.1
 
Jan 2008 50.8 48.9 55.7 47.9 53.1 48.3
Feb 2008 48.8 48.9 51.3 47.0 51.2 45.8
Mar 2008 49.0 47.1 49.6 49.3 53.7 45.3
Apr 2008 48.6 46.4 49.3 45.8 53.8 47.8
May 2008 49.3 48.6 50.4 46.2 53.2 48.0
Jun 2008 49.5 49.3 49.9 44.1 54.5 49.8
Jul 2008 49.5 44.9 52.0 51.0 54.1 45.4
Aug 2008 49.3 48.2 51.3 48.0 50.5 48.4
Sep 2008 43.4 39.2 41.0 40.9 51.8 44.0
Oct 2008 38.7 32.4 33.6 34.2 49.3 44.0
Nov 2008 36.6 28.1 32.0 34.3 48.6 40.1
Dec 2008 32.9 23.1 26.3 29.9 45.7 39.6

The revised breakeven point for the overall economy is a PMI of 41.2 percent. A PMI over 41.2 percent indicates an expanding overall economy. A PMI below 41.2 percent indicates the overall economy is declining.


Revised Non-Manufacturing Seasonally Adjusted Indexes 2005-2008

  NMI Business
Activity
New
Orders
Employment Prices
Jan 2005   61.1 62.1 53.7 68.6
Feb 2005   61.2 63.0 58.9 70.0
Mar 2005   61.7 61.9 57.2 66.1
Apr 2005   59.2 57.2 53.3 63.8
May 2005   58.1 58.3 51.9 56.8
Jun 2005   61.3 59.1 56.7 60.3
Jul 2005   61.0 61.9 55.5 68.5
Aug 2005   64.8 64.6 60.8 68.3
Sep 2005   55.4 57.8 55.6 78.8
Oct 2005   59.1 58.1 54.0 76.3
Nov 2005   58.9 60.0 57.1 71.2
Dec 2005   59.9 62.2 56.2 67.2
 
Jan 2006   57.6 57.6 52.7 69.3
Feb 2006   61.2 57.8 57.4 68.5
Mar 2006   60.5 60.0 54.9 60.8
Apr 2006   61.7 60.8 56.4 70.0
May 2006   58.3 58.0 55.2 70.0
Jun 2006   57.0 56.9 52.6 71.7
Jul 2006   55.8 56.3 54.0 72.9
Aug 2006   56.8 52.2 52.8 74.3
Sep 2006   54.9 58.1 53.0 57.2
Oct 2006   57.1 55.8 52.3 54.0
Nov 2006   58.7 57.2 52.1 55.7
Dec 2006   56.2 54.3 52.5 59.0
 
Jan 2007   57.6 56.3 52.7 56.5
Feb 2007   55.1 56.1 52.2 55.4
Mar 2007   53.5 54.6 51.8 63.0
Apr 2007   56.3 54.7 51.1 63.4
May 2007   58.0 55.8 53.1 63.3
Jun 2007   60.7 56.8 55.2 64.2
Jul 2007   56.3 53.2 51.5 61.6
Aug 2007   55.6 55.6 48.8 60.9
Sep 2007   55.2 53.9 52.5 65.2
Oct 2007   55.7 55.8 52.6 65.9
Nov 2007   54.8 52.2 51.2 74.4
Dec 2007   53.5 52.3 51.4 71.7
 
Jan 2008 44.6 41.6 44.2 43.5 71.2
Feb 2008 49.7 51.0 50.5 47.1 70.1
Mar 2008 49.9 52.6 50.6 47.3 71.1
Apr 2008 51.9 51.2 50.2 50.0 72.2
May 2008 51.2 52.9 52.4 48.3 75.6
Jun 2008 48.8 50.7 48.7 45.2 82.1
Jul 2008 49.6 50.1 48.0 46.8 78.8
Aug 2008 50.4 50.8 49.5 45.6 74.1
Sep 2008 50.0 51.5 50.6 44.2 70.6
Oct 2008 44.6 44.5 44.3 41.7 53.3
Nov 2008 37.4 33.3 35.6 31.1 37.0
Dec 2008 40.1 38.9 38.9 34.5 36.1

Beginning in January 2008, ISM began calculating a composite index for the Non-Manufacturing sector (NMI).


Charts Illustrating Former and Revised Indexes

Manufacturing PMI


Non-Manufacturing Business Activity Index

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).


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