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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 27, 2011

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 2011 ISM Manufacturing Report On Business®, which is scheduled to be released on February 1, 2011, and the January 2011 ISM Non-Manufacturing Report On Business®, which will be released on February 3, 2011.

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 (2011).

The X12-ARIMA program was used to develop the revisions to the Manufacturing and Non-Manufacturing indexes for 2007 through 2010, as well as the 2011 projected seasonal factors. The 2011 seasonal factors will be recomputed when the actual data are known in early 2012. Projected seasonal factors for 2011 and revised seasonally adjusted indexes are shown below, followed by charts tracking both the former and the revised PMI for Manufacturing and Business Activity Index for Non-Manufacturing.




2011 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 2011 0.944 0.977 0.948 0.964 0.992
February 2011 0.970 1.003 0.976 0.985 1.035
March 2011 1.051 0.971 0.992 0.990 1.033
April 2011 1.143 1.082 1.029 1.005 1.016
May 2011 1.118 1.075 1.049 1.024 0.996
June 2011 1.076 1.065 1.035 1.013 0.988
July 2011 1.026 0.995 1.038 1.051 0.974
August 2011 0.978 1.028 1.032 1.038 1.042
September 2011 0.998 0.996 0.985 1.021 1.000
October 2011 0.925 1.007 1.000 0.985 0.996
November 2011 0.890 0.910 0.975 0.971 0.963
December 2011 0.886 0.901 0.944 0.951 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.


2011 Seasonal Adjustment Factors for ISM Non-Manufacturing Indexes

  Business
Activity
New
Orders

Employment

Prices
January 2011 0.890 0.924 0.881 0.985
February 2011 0.934 0.955 0.972 0.969
March 2011 1.055 0.991 1.015 1.033
April 2011 1.136 1.139 1.108 1.105
May 2011 1.072 1.038 1.102 1.063
June 2011 1.086 1.045 1.062 1.051
July 2011 0.981 0.996 1.067 1.068
August 2011 0.971 0.984 0.978 0.934
September 2011 0.989 0.974 0.954 0.945
October 2011 0.976 0.982 0.901 0.964
November 2011 0.952 1.010 1.002 0.944
December 2011 0.979 0.987 0.972 0.947

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 2007-2010

  PMI New
Orders
Production Employment Supplier
Deliveries
Inventories
Jan 2007 49.9 53.9 51.1 50.8 52.8 40.9
Feb 2007 52.0 56.5 54.6 52.1 51.5 45.4
Mar 2007 51.3 52.9 55.2 49.2 51.7 47.5
Apr 2007 52.6 56.7 56.6 52.8 50.4 46.3
May 2007 52.3 56.4 57.0 51.8 50.4 46.0
Jun 2007 52.4 56.8 59.5 50.9 49.4 45.4
Jul 2007 51.7 55.8 54.7 49.9 50.3 47.7
Aug 2007 50.2 53.9 53.5 49.1 49.6 44.7
Sep 2007 50.0 52.0 54.9 50.3 51.1 41.5
Oct 2007 50.9 55.6 49.9 51.5 51.5 45.8
Nov 2007 51.5 54.9 54.4 48.8 52.1 47.2
Dec 2007 49.0 47.4 48.8 48.9 53.9 46.0
 
Jan 2008 51.1 50.5 54.4 48.0 53.3 49.4
Feb 2008 48.9 51.2 50.8 46.6 50.5 45.5
Mar 2008 49.0 47.0 49.8 49.0 53.9 45.1
Apr 2008 48.8 45.4 49.7 46.6 53.9 48.2
May 2008 48.8 46.7 50.1 45.5 53.4 48.1
Jun 2008 49.0 47.5 48.8 43.7 54.6 50.5
Jul 2008 49.6 44.4 53.3 51.5 53.5 45.1
Aug 2008 48.0 46.5 49.2 46.5 49.4 48.5
Sep 2008 43.8 39.7 42.9 41.4 51.9 43.0
Oct 2008 39.0 33.6 33.6 34.2 49.9 43.7
Nov 2008 36.9 28.6 32.9 33.8 49.1 40.0
Dec 2008 33.3 23.7 26.3 30.6 46.4 39.3
 
Jan 2009 35.7 34.1 30.7 29.8 45.6 38.3
Feb 2009 36.0 34.9 35.9 26.4 45.9 36.7
Mar 2009 36.6 41.5 37.1 28.3 43.9 32.0
Apr 2009 39.9 45.1 40.7 35.0 44.9 34.0
May 2009 41.9 47.8 45.0 33.7 49.9 33.1
Jun 2009 44.7 48.9 51.8 40.7 50.8 31.3
Jul 2009 49.0 54.8 59.6 45.7 51.4 33.4
Aug 2009 51.4 62.9 59.4 44.8 55.6 34.5
Sep 2009 53.2 60.9 58.8 46.8 58.2 41.5
Oct 2009 55.8 60.5 61.9 52.5 57.5 46.7
Nov 2009 54.7 62.7 62.9 50.4 56.4 41.0
Dec 2009 56.4 66.4 61.8 53.2 57.5 43.0
 
Jan 2010 58.3 66.1 65.1 54.3 59.6 46.4
Feb 2010 57.1 61.9 58.8 57.3 60.0 47.3
Mar 2010 60.4 62.9 64.3 55.8 64.1 54.7
Apr 2010 59.6 63.6 66.4 58.7 59.8 49.7
May 2010 57.8 61.0 63.8 57.4 60.6 46.2
Jun 2010 55.3 57.0 59.6 55.6 57.7 46.6
Jul 2010 55.1 52.9 56.9 57.6 58.0 50.3
Aug 2010 55.2 53.7 57.2 58.2 55.9 50.9
Sep 2010 55.3 51.6 58.1 56.9 53.8 56.0
Oct 2010 56.9 59.9 61.4 57.9 52.3 53.2
Nov 2010 58.2 59.6 58.2 59.0 58.1 56.1
Dec 2010 58.5 62.0 63.0 58.9 56.7 51.8

The revised breakeven point for the overall economy is a PMI of 42.5 percent. A PMI over 42.5 percent indicates an expanding overall economy. A PMI below 42.5 percent indicates the overall economy is declining.


Revised Non-Manufacturing Seasonally Adjusted Indexes 2007-2010

  NMI Business
Activity
New
Orders
Employment Prices
Jan 2007   57.9 56.0 54.2 57.4
Feb 2007   55.8 56.5 51.9 56.5
Mar 2007   52.8 53.9 51.4 63.0
Apr 2007   56.8 55.7 51.1 63.2
May 2007   58.1 57.0 51.8 63.3
Jun 2007   58.4 55.0 53.6 61.9
Jul 2007   57.4 55.2 51.6 59.7
Aug 2007   55.4 55.5 48.6 61.4
Sep 2007   53.9 53.4 52.4 67.4
Oct 2007   55.2 54.8 53.2 65.9
Nov 2007   56.0 51.9 52.6 73.6
Dec 2007   54.3 51.9 52.8 72.7
 
Jan 2008 45.3 42.0 44.9 45.3 71.0
Feb 2008 50.2 53.5 50.4 46.9 73.0
Mar 2008 49.6 51.4 50.8 47.3 71.9
Apr 2008 51.3 51.8 49.6 47.6 72.4
May 2008 50.7 52.1 52.2 47.3 75.4
Jun 2008 49.1 50.8 50.0 45.2 79.7
Jul 2008 49.8 50.5 49.3 45.8 76.8
Aug 2008 50.1 50.4 49.2 45.3 73.4
Sep 2008 49.8 50.5 50.7 44.5 73.6
Oct 2008 44.5 43.6 43.2 43.0 52.9
Nov 2008 37.6 34.5 35.0 31.5 36.6
Dec 2008 40.0 38.9 38.3 34.9 37.0
 
Jan 2009 43.3 44.2 40.9 36.4 41.5
Feb 2009 42.0 41.5 41.4 37.0 48.7
Mar 2009 41.2 44.4 40.1 32.3 39.7
Apr 2009 43.2 44.7 46.8 35.8 40.2
May 2009 43.5 41.9 44.3 37.8 47.0
Jun 2009 46.7 48.8 49.6 42.4 52.7
Jul 2009 46.4 46.3 48.3 41.1 40.3
Aug 2009 48.9 52.1 50.6 43.7 62.6
Sep 2009 50.1 53.5 53.2 43.6 51.0
Oct 2009 50.2 53.7 53.9 42.6 52.1
Nov 2009 49.9 52.6 55.1 43.2 57.9
Dec 2009 50.1 53.2 52.1 44.6 59.4
 
Jan 2010 50.7 52.6 53.8 46.0 59.6
Feb 2010 52.7 55.1 54.9 47.4 59.6
Mar 2010 54.1 58.1 61.0 47.9 62.0
Apr 2010 54.6 58.9 57.3 48.7 63.1
May 2010 54.8 60.0 56.7 49.4 61.0
Jun 2010 53.5 57.2 55.0 48.8 55.9
Jul 2010 53.7 56.3 56.1 50.3 53.2
Aug 2010 52.8 55.8 55.0 49.5 60.9
Sep 2010 53.9 54.4 55.6 50.7 61.0
Oct 2010 54.6 58.5 56.6 52.1 66.4
Nov 2010 56.0 59.4 58.5 53.6 64.7
Dec 2010 57.1 62.9 61.4 52.6 69.5

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


Charts Illustrating Former and Revised Indexes

Manufacturing PMI Chart: 2007-2010


Non-Manufacturing Business Activity Chart: 2007-2010

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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