Institute for Supply Management

FOR RELEASE: January 25, 2007

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

2007 U.S. Department Of Commerce Annual Adjustments to Seasonal Factors

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 2007 ISM Manufacturing Report On Business®, which is scheduled to be released on February 1, 2007, and the January 2007 ISM Non-Manufacturing Report On Business®, which will be released on February 5, 2007.

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 (2007).

The X12-ARIMA program was used to develop the revisions to the indexes for 2003 through 2006 as well as the 2007 projected seasonal factors for Manufacturing. For the Non-Manufacturing Report, these indexes have been revised from 2003 through 2006 also. The 2007 seasonal factors will be recomputed when the actual data are known in early 2008. Projected seasonal factors for 2007 and revised seasonally adjusted indexes for 2003-2006 are below, followed by charts tracking both the former and the revised PMI and Business Activity Index for Non-Manufacturing.

As part of the Department of Commerce's annual review, the Manufacturing Export Orders series will no longer be seasonally adjusted, effective with the January 2007 seasonal adjustments.



2007 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 2007 0.984 0.977 0.970 0.967 1.015
February 2007 1.047 1.017 1.018 0.994 1.054
March 2007 1.075 1.048 1.026 1.003 1.032
April 2007 1.069 1.065 1.036 1.006 1.015
May 2007 1.007 1.020 1.060 1.024 0.998
June 2007 1.012 0.994 1.037 1.017 0.994
July 2007 0.992 0.971 0.996 1.009 0.959
August 2007 0.959 0.963 0.965 1.020 1.024
September 2007 1.020 1.053 0.968 1.001 0.998
October 2007 0.953 0.968 0.962 0.999 0.964
November 2007 0.950 0.973 0.994 0.987 0.970
December 2007 0.930 0.951 0.969 0.975 0.978
           
Weight .30 .25 .20 .15 .10


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. Multiply each seasonally adjusted diffusion index by its weight, and then add all five together.

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


2007 Seasonal Adjustment Factors for ISM Non-Manufacturing Indexes

  Business
Activity		 New
Orders
Employment
Prices
January 2007 0.890 0.947 0.958 0.979
February 2007 0.986 0.994 0.967 1.004
March 2007 1.068 1.023 1.013 1.058
April 2007 1.090 1.073 1.030 1.087
May 2007 1.038 1.046 1.039 1.031
June 2007 1.063 1.055 1.046 1.008
July 2007 1.003 1.014 1.044 1.028
August 2007 0.968 0.973 0.981 0.973
September 2007 0.967 0.965 0.967 0.968
October 2007 0.976 0.969 0.965 1.000
November 2007 1.007 1.007 1.003 0.935
December 2007 0.946 0.935 0.988 0.928


Revised Manufacturing Seasonally Adjusted Indexes 2003-2006

 
PMI		 New
Orders
Production
Employment		 Supplier
Deliveries
Inventories
Jan 2003 52.8 58.2 54.1 47.4 52.8 44.2
Feb 2003 49.7 51.9 53.6 42.6 52.8 43.0
Mar 2003 46.5 47.2 47.0 42.2 52.6 42.3
Apr 2003 46.4 47.2 48.5 41.8 49.9 43.1
May 2003 49.9 53.4 52.9 42.4 50.6 45.7
Jun 2003 50.4 53.6 54.1 45.6 49.8 42.0
Jul 2003 52.1 56.8 53.9 46.3 51.5 46.3
Aug 2003 55.5 61.1 61.8 47.1 53.0 43.1
Sep 2003 54.3 60.8 57.8 46.5 53.4 43.4
Oct 2003 57.5 64.4 62.8 48.6 54.6 45.6
Nov 2003 60.9 69.1 66.6 50.4 56.4 49.7
Dec 2003 63.2 71.3 70.0 54.1 59.3 45.9
             
Jan 2004 63.1 70.0 68.9 54.3 61.6 47.8
Feb 2004 61.8 66.4 65.7 55.8 62.8 48.7
Mar 2004 62.4 65.9 65.8 56.9 66.7 48.2
Apr 2004 62.9 67.4 66.6 57.4 66.8 45.0
May 2004 62.9 64.5 65.5 60.3 68.1 48.7
Jun 2004 61.4 61.3 63.9 59.5 66.9 51.1
Jul 2004 61.2 63.0 64.2 57.4 64.5 50.9
Aug 2004 59.5 61.9 59.9 56.5 62.7 52.1
Sep 2004 57.9 57.7 59.5 58.0 59.8 51.6
Oct 2004 57.1 58.1 59.2 55.4 59.1 49.4
Nov 2004 57.2 59.8 57.6 56.7 56.8 50.2
Dec 2004 58.5 65.6 57.8 53.6 55.6 53.0
             
Jan 2005 56.7 57.1 58.1 58.4 54.1 52.7
Feb 2005 55.1 55.2 57.7 55.9 54.1 48.3
Mar 2005 55.3 57.5 56.6 53.1 53.0 53.6
Apr 2005 53.5 54.9 56.6 51.8 51.7 47.8
May 2005 51.9 52.8 55.6 48.7 50.7 48.1
Jun 2005 54.1 56.7 56.4 50.9 53.1 48.2
Jul 2005 56.1 59.5 59.6 53.6 52.4 47.6
Aug 2005 53.4 56.3 55.1 53.0 50.5 45.7
Sep 2005 57.9 61.0 60.6 53.4 58.7 49.7
Oct 2005 58.5 60.1 61.7 54.9 61.2 48.4
Nov 2005 57.7 59.4 61.2 55.8 57.1 48.9
Dec 2005 55.5 58.6 58.3 53.3 52.9 47.3
             
Jan 2006 55.3 57.9 57.6 52.6 55.3 46.8
Feb 2006 56.1 60.5 57.9 53.7 52.2 49.3
Mar 2006 55.3 58.4 57.2 52.7 53.7 48.5
Apr 2006 56.9 57.6 59.8 55.1 57.2 50.7
May 2006 54.7 54.8 57.3 52.7 57.1 48.4
Jun 2006 54.0 57.4 55.2 49.4 55.1 47.8
Jul 2006 54.4 55.6 56.8 51.1 55.4 50.1
Aug 2006 54.3 54.6 55.5 53.9 54.9 49.8
Sep 2006 52.7 54.2 54.9 49.6 54.1 47.1
Oct 2006 51.5 52.1 52.7 50.6 50.6 49.3
Nov 2006 49.9 49.7 49.3 48.9 52.8 49.1
Dec 2006 51.4 51.9 52.4 49.4 53.3 48.5


Revised Non-Manufacturing Seasonally Adjusted Indexes 2003-2006

  Business
Activity		 New
Orders
Employment
Prices
Jan 2003 56.2 54.4 50.5 58.0
Feb 2003 55.6 53.9 48.5 60.5
Mar 2003 46.3 49.9 48.1 59.4
Apr 2003 50.7 50.4 48.7 55.7
May 2003 54.6 55.9 48.5 50.0
Jun 2003 59.2 57.1 49.3 52.3
Jul 2003 62.7 62.3 50.5 51.4
Aug 2003 65.1 66.9 51.7 56.1
Sep 2003 63.8 61.4 50.1 59.5
Oct 2003 64.4 64.2 53.0 57.2
Nov 2003 61.1 61.3 54.4 58.5
Dec 2003 60.0 61.2 54.0 61.1
         
Jan 2004 67.9 64.7 54.1 61.8
Feb 2004 62.2 60.9 53.1 59.5
Mar 2004 61.8 62.3 53.6 65.1
Apr 2004 63.9 62.5 54.5 68.1
May 2004 63.3 60.8 55.2 73.6
Jun 2004 59.8 62.1 56.5 73.9
Jul 2004 63.6 63.6 49.6 70.4
Aug 2004 59.3 59.5 53.2 70.0
Sep 2004 59.8 60.8 55.3 67.7
Oct 2004 60.8 61.7 56.2 71.4
Nov 2004 62.6 60.4 54.9 71.7
Dec 2004 65.2 62.4 54.9 72.2
         
Jan 2005 62.6 61.4 52.6 67.7
Feb 2005 61.1 62.2 59.2 69.0
Mar 2005 60.9 61.6 56.6 66.4
Apr 2005 58.4 57.9 53.5 63.5
May 2005 58.3 58.7 53.1 59.1
Jun 2005 61.0 59.1 56.9 60.5
Jul 2005 61.1 61.9 55.4 67.4
Aug 2005 64.8 65.6 59.9 66.9
Sep 2005 55.2 57.4 55.8 80.5
Oct 2005 59.4 57.9 53.8 74.9
Nov 2005 58.8 59.3 56.9 72.6
Dec 2005 60.6 63.3 56.9 67.9
         
Jan 2006 59.1 56.9 51.6 67.8
Feb 2006 60.5 56.8 57.5 67.0
Mar 2006 59.6 59.3 54.2 61.1
Apr 2006 61.1 61.6 56.9 69.8
May 2006 59.2 59.0 56.9 73.2
Jun 2006 56.9 56.9 52.6 72.3
Jul 2006 55.7 56.0 54.1 72.1
Aug 2006 56.9 53.3 51.9 71.9
Sep 2006 54.6 57.5 53.3 58.2
Oct 2006 57.4 55.8 51.8 52.6
Nov 2006 58.3 56.2 51.9 57.2
Dec 2006 56.7 55.6 53.2 59.7


Charts Illustrating Former and Revised Indexes

MANUFACTURING PMI CHART

NON-MANUFACTURING BUSINESS ACTIVITY CHART

For a downloadable spreadsheet illustrating side-by-side comparisons of previous and adjusted indexes, visit the ISM Web site at:

www.ism.ws/files/ISMReport/SeasonalAdjustCompare2007.xls

The Manufacturing 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 43,000 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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