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U.S. Department of Commerce Determines First Seasonal Factors for NAPM Non-Manufacturing Report On Business®

FOR RELEASE: January 17, 2001

Contact: Kristen Kioa
  ISM, Media Relations
  Tempe, Arizona
  800/888-6276, Ext. 3015

(Tempe, Arizona) The U.S. Department of Commerce has determined seasonal factors that will be used to calculate the Business Activity Index, as well as the diffusion indexes for New Orders, Employment, and Imports within the monthly National Association of Purchasing Management's Non-Manufacturing Report On Business®. Economists and managers who track these indexes will note that these indexes are seasonally adjusted effective with the January 2001 NAPM Non-Manufacturing Report On Business®, which is scheduled to be issued on February 5, 2001.

The NAPM Non-Manufacturing Report On Business® began in mid-1997. Enough history has now accumulated to test for seasonality. Seasonal adjustment factors are used to allow for the effects of repetitive intrayear variations resulting primarily from normal differences in weather conditions, various institutional arrangements, and differences attributable to nonmovable holidays. It is standard practice to project the seasonal adjustment factors used to calculate the indexes a year ahead (2001). The U.S. Department of Commerce then takes the actual experience for that year and adjusts the factors, which also affects the indexes for the previous years: 1997, 1998, 1999, and 2000.

With the history accumulated so far, four of the ten series exhibit identifiable seasonality: Business Activity, New Orders, Employment, and Imports. Projected seasonal adjustment factors for 2001 for these four series are shown on the next page and seasonally adjusted data for 1997 — 2000 are shown on page 3. The remaining six indexes do not exhibit identifiable seasonality; however, this will be re-evaluated in coming years. Because of the relatively brief history of the NAPM Non-Manufacturing Report on Business®, the seasonal adjustment factors are subject to greater revision than the seasonal adjustment factors for the NAPM Manufacturing Report on Business®.

Please click here to view the 2001 Seasonal Adjustment Tables.