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 27, 2010

Contact: Rose Marie Goupil
  ISM, ROB 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 2010 ISM Manufacturing Report On Business®, which is scheduled to be released on February 1, 2010, and the January 2010 ISM Non-Manufacturing Report On Business®, which will be released on February 3, 2010.

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 (2010).

The X12-ARIMA program was used to develop the revisions to the indexes for 2006 through 2009 as well as the 2010 projected seasonal factors for Manufacturing. For the Non-Manufacturing Report, these indexes have been revised from 2006 through 2009 also. The 2010 seasonal factors will be recomputed when the actual data are known in early 2011. Projected seasonal factors for 2010 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.




2010 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 2010 0.949 0.959 0.966 0.957 0.990
February 2010 1.017 1.010 0.998 0.966 1.036
March 2010 1.057 1.023 1.007 0.978 1.022
April 2010 1.096 1.061 1.025 0.979 1.023
May 2010 1.051 1.043 1.020 1.017 1.008
June 2010 1.042 1.034 0.995 1.021 1.004
July 2010 1.000 0.983 1.006 1.046 0.977
August 2010 1.008 0.994 1.001 1.025 1.031
September 2010 1.018 1.026 0.992 1.051 1.007
October 2010 0.943 0.981 1.005 1.006 0.983
November 2010 0.927 0.963 1.000 0.987 0.953
December 2010 0.895 0.922 0.988 0.966 0.966

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.


2010 Seasonal Adjustment Factors for ISM Non-Manufacturing Indexes

  Business
Activity
New
Orders

Employment

Prices
January 2010 0.919 0.924 0.919 0.964
February 2010 0.940 0.955 0.946 0.952
March 2010 1.033 0.987 0.974 1.010
April 2010 1.069 1.073 1.060 1.082
May 2010 1.055 1.069 1.082 1.073
June 2010 1.085 1.067 1.067 1.097
July 2010 0.967 0.987 1.052 1.073
August 2010 0.984 1.001 0.985 0.954
September 2010 1.004 0.984 0.977 0.949
October 2010 1.002 0.996 0.933 0.944
November 2010 0.982 1.005 0.996 0.973
December 2010 0.961 0.952 1.009 0.928

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 2006-2009

  PMI New
Orders
Production Employment Supplier
Deliveries
Inventories
Jan 2006 55.0 59.8 58.8 53.1 55.3 48.0
Feb 2006 55.5 62.3 58.4 53.6 53.1 50.2
Mar 2006 54.7 59.1 58.4 53.2 53.9 48.9
Apr 2006 55.8 56.2 59.7 54.9 58.0 50.3
May 2006 53.5 53.1 56.1 53.1 57.1 48.1
Jun 2006 52.4 55.9 53.3 50.4 55.0 47.3
Jul 2006 53.2 55.2 56.2 50.9 54.5 49.1
Aug 2006 52.8 52.3 54.1 53.2 54.8 49.5
Sep 2006 51.8 54.1 56.0 49.1 52.9 46.7
Oct 2006 50.5 52.3 52.0 49.4 50.7 48.3
Nov 2006 50.4 51.1 49.7 48.8 52.7 49.8
Dec 2006 52.0 54.0 54.1 49.3 53.3 49.2
 
Jan 2007 49.2 52.0 50.5 49.9 52.8 40.9
Feb 2007 51.9 56.4 54.4 51.3 52.0 45.4
Mar 2007 51.2 52.5 54.1 49.4 52.0 47.9
Apr 2007 52.9 57.1 57.4 52.9 51.1 45.9
May 2007 52.6 57.3 57.0 52.7 50.3 45.6
Jun 2007 53.2 58.7 60.5 52.6 49.5 44.8
Jul 2007 52.1 57.1 55.1 50.0 50.8 47.6
Aug 2007 50.5 52.7 54.5 50.2 49.9 45.1
Sep 2007 50.4 53.6 56.0 50.9 50.3 41.2
Oct 2007 49.9 53.0 49.0 50.4 50.6 46.3
Nov 2007 50.7 53.9 52.4 47.7 51.6 47.7
Dec 2007 48.7 47.4 48.8 47.6 53.4 46.1
 
Jan 2008 50.5 48.9 53.7 46.7 53.6 49.5
Feb 2008 48.7 50.1 50.5 46.6 51.1 45.4
Mar 2008 49.1 47.3 48.8 49.6 54.4 45.5
Apr 2008 48.9 45.6 49.9 46.4 54.9 47.9
May 2008 49.6 48.6 51.3 46.9 53.4 47.6
Jun 2008 50.0 49.9 50.3 45.5 54.4 49.8
Jul 2008 49.6 45.0 53.0 51.4 53.8 45.0
Aug 2008 49.2 46.7 51.9 48.8 49.8 49.0
Sep 2008 43.2 38.8 42.4 41.1 50.9 42.7
Oct 2008 38.4 32.3 33.1 33.5 49.0 44.3
Nov 2008 36.7 28.6 32.2 33.6 48.6 40.4
Dec 2008 32.5 22.9 25.5 29.0 45.8 39.3
 
Jan 2009 35.5 33.2 30.8 29.0 45.9 38.4
Feb 2009 35.7 33.9 35.6 25.9 46.6 36.7
Mar 2009 36.4 41.2 35.7 28.3 44.4 32.3
Apr 2009 40.4 46.5 41.0 35.0 45.9 33.7
May 2009 43.2 51.4 47.0 35.1 50.0 32.7
Jun 2009 45.3 49.9 53.2 42.1 50.5 30.9
Jul 2009 49.1 55.5 59.0 45.9 51.7 33.3
Aug 2009 52.8 63.0 62.9 47.0 56.0 34.9
Sep 2009 52.4 59.9 57.5 46.5 56.8 41.2
Oct 2009 55.2 58.3 62.2 51.8 56.3 47.3
Nov 2009 53.7 61.5 60.2 49.6 55.7 41.4
Dec 2009 54.9 64.8 59.7 50.2 56.8 43.0

The revised breakeven point for the overall economy is a PMI of 42 percent. A PMI over 42 percent indicates an expanding overall economy. A PMI below 42 percent indicates the overall economy is declining.


Revised Non-Manufacturing Seasonally Adjusted Indexes 2006-2009

  NMI Business
Activity
New
Orders
Employment Prices
Jan 2006   57.8 57.4 53.4 69.6
Feb 2006   61.6 57.9 57.6 69.8
Mar 2006   60.8 60.3 55.2 61.4
Apr 2006   61.8 61.1 56.2 69.8
May 2006   58.7 58.3 55.3 69.6
Jun 2006   56.2 57.0 51.9 69.7
Jul 2006   56.1 56.4 53.9 70.9
Aug 2006   56.8 52.1 52.5 74.2
Sep 2006   54.3 57.9 52.9 59.4
Oct 2006   56.7 55.0 52.4 53.4
Nov 2006   58.6 56.7 52.0 55.4
Dec 2006   56.0 54.4 52.3 59.7
 
Jan 2007   57.7 56.1 53.7 56.7
Feb 2007   55.9 56.5 52.7 56.5
Mar 2007   53.7 55.0 52.2 64.4
Apr 2007   56.5 54.9 51.0 63.5
May 2007   58.8 56.4 53.0 63.1
Jun 2007   59.8 56.8 54.2 61.7
Jul 2007   56.9 53.5 51.4 59.5
Aug 2007   55.5 55.6 48.3 60.4
Sep 2007   54.1 53.4 52.3 67.8
Oct 2007   54.9 54.7 52.8 65.4
Nov 2007   54.7 51.4 51.1 73.8
Dec 2007   53.2 52.3 51.1 72.7
 
Jan 2008 44.8 41.6 44.1 44.6 71.1
Feb 2008 50.2 52.2 51.0 47.7 71.6
Mar 2008 50.3 53.0 51.4 47.9 73.6
Apr 2008 52.0 51.6 50.5 49.8 72.7
May 2008 51.7 54.0 53.4 48.2 75.9
Jun 2008 48.2 49.7 48.5 44.2 78.6
Jul 2008 49.9 50.9 48.4 46.6 75.8
Aug 2008 50.2 50.6 49.5 45.0 72.9
Sep 2008 49.4 50.1 49.9 44.1 72.9
Oct 2008 44.2 43.6 43.3 42.0 53.3
Nov 2008 37.2 33.3 34.9 31.1 36.5
Dec 2008 39.9 38.7 38.8 34.2 36.6
 
Jan 2009 43.2 44.1 41.6 35.4 42.1
Feb 2009 42.1 41.3 41.3 37.9 48.9
Mar 2009 41.2 44.5 39.4 32.8 40.8
Apr 2009 43.9 45.7 47.4 36.9 40.6
May 2009 44.5 43.6 45.4 38.9 47.4
Jun 2009 46.3 48.8 48.4 42.2 51.2
Jul 2009 46.7 47.0 48.6 41.3 39.7
Aug 2009 48.2 50.9 50.0 42.8 61.5
Sep 2009 50.1 53.2 53.1 44.1 50.2
Oct 2009 50.1 54.0 54.2 41.7 53.4
Nov 2009 48.4 49.6 53.7 41.7 57.1
Dec 2009 49.8 53.2 52.0 43.6 59.6

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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