ISM Index

The American early indicator is based on a monthly survey among purchasing managers from 350 companies in 20 representative US industry sectors. Thereby, the purchasing managers evaluate their current and future economic situation.

The Purchasing Managers’ Index for the manufacturing sector has been calculated for more than 80 years. The Institute for Supply Management (ISM), which is responsible for the compilation and publication of the index, comprises 180 sub-institutions and has more than 45,000 members.

Since May 2001, the ISM Purchasing Managers’ Index has also considered services alongside the supply of goods. Today it comprises the sub-areas: incoming orders (30 percent), production (25 percent), employment (20 percent), delivery times (15 percent) and stock (10 percent).

For the calculation of the index, the sentiment among each sub-area is regarded in comparison to the previous month. All sectors that were able to post an increase and half of the unchanged values are added up. Thereby, a total value of above 50 points towards an expansion in the manufacturing industry, while a value below 50 indicates a downturn. An index level of 50 means a zero-growth rate and any value below 40 indicates a recession.

This indicator is published on the first working day of each month.

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