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

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Jan 28, 2013, 10:00 ET

TEMPE, Ariz., Jan. 28, 2013 /PRNewswire/ -- 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 2013 ISM Manufacturing Report On Business^®, which is scheduled to be released on February 1, 2013, and the January 2013 ISM Non-Manufacturing Report On Business^®, which will be released on February 5, 2013.

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 one year ahead (2013).

The X12-ARIMA program was used to develop the revisions to the Manufacturing and Non-Manufacturing indexes for 2009 through 2012, as well as the 2013 projected seasonal factors. The 2013 seasonal factors will be recomputed when the actual data are known in early 2014. Projected seasonal factors for 2013 and revised seasonally adjusted indexes are shown below.

2013 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

Jan	2013	1.003	0.988	0.972	0.980
Feb	2013	1.046	1.051	1.017	0.992
Mar	2013	1.108	1.120	0.996	1.053
Apr	2013	1.090	1.112	1.085	1.031
May	2013	1.087	1.122	1.038	1.036
Jun	2013	1.051	1.040	1.057	1.020
Jul	2013	0.918	0.885	1.002	1.027
Aug	2013	0.933	0.962	1.003	1.003
Sep	2013	0.967	0.919	0.956	1.007
Oct	2013	0.924	0.938	0.987	0.960
Nov	2013	0.927	0.947	0.938	0.949
Dec	2013	0.935	0.901	0.931	0.942

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). Note: As of January 2012, the ISM Manufacturing Inventories Index is no longer seasonally adjusted.

3) Add all five index numbers together and divide by five.

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

2013 Seasonal Adjustment Factors for ISM Non-Manufacturing Indexes

		Business Activity	New Orders	Employment	Prices

Jan	2013	0.939	0.983	0.905	1.017
Feb	2013	1.001	1.013	0.988	1.013
Mar	2013	1.088	1.089	1.032	1.074
Apr	2013	1.073	1.065	1.086	1.093
May	2013	1.044	1.054	1.087	1.067
Jun	2013	1.047	1.012	1.080	0.986
Jul	2013	0.969	0.945	1.052	0.949
Aug	2013	0.941	0.934	0.965	0.973
Sep	2013	0.999	0.981	0.949	0.962
Oct	2013	0.955	0.950	0.925	0.971
Nov	2013	0.964	0.993	0.953	0.949
Dec	2013	0.979	0.981	0.977	0.944

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 2009-2012

		PMI^™	New Orders	Production		Employment		Supplier Deliveries

Jan	2009	34.9	31.8	30.3		28.8	45.5
Feb	2009	35.5	32.8	35.3		25.5	46.0
Mar	2009	36.0	40.3	36.3		28.6	41.9
Apr	2009	39.5	46.5	39.0		33.2	44.4
May	2009	41.7	49.0	42.7		34.8	49.2
Jun	2009	45.8	51.7	55.4		40.7	50.4
Jul	2009	49.9	57.6	59.9		47.1	52.2
Aug	2009	53.5	66.6	62.4		46.1	56.5
Sep	2009	54.4	63.3	61.2		47.8	58.4
Oct	2009	56.0	59.9	63.0		52.4	58.4
Nov	2009	54.4	60.6	62.7		51.7	57.5
Dec	2009	55.3	63.0	62.3		51.6	58.3

Jan	2010	56.6	60.4	62.9		54.4	59.5
Feb	2010	55.7	57.4	57.2		55.0	60.0
Mar	2010	59.3	62.6	61.9		55.1	60.6
Apr	2010	58.9	65.1	62.7		57.0	59.0
May	2010	57.8	63.9	62.6		56.8	59.8
Jun	2010	56.1	59.5	62.0		55.9	57.3
Jul	2010	56.4	56.1	58.9		58.8	59.2
Aug	2010	57.8	56.1	61.3		61.2	57.3
Sep	2010	56.5	54.1	61.1		57.2	54.1
Oct	2010	57.3	58.2	62.1		59.8	53.3
Nov	2010	58.2	58.3	59.4		60.0	59.4
Dec	2010	57.3	58.8	61.5		59.0	57.4

Jan	2011	59.2	63.2	63.1	59.6				58.1
Feb	2011	59.6	62.7	63.9	61.9				59.2
Mar	2011	59.3	62.7	63.9	61.5				59.5
Apr	2011	59.4	63.8	59.5	60.2				59.2
May	2011	53.5	52.4	53.1	58.6				55.0
Jun	2011	55.8	54.1	56.7	59.0				55.9
Jul	2011	52.3	51.3	54.2	56.6				51.5
Aug	2011	53.2	52.9	53.0	53.4				52.0
Sep	2011	53.2	51.6	54.4	56.1				51.9
Oct	2011	51.5	52.2	53.0	53.2				52.4
Nov	2011	52.3	54.8	55.8	53.2				51.1
Dec	2011	52.9	55.1	58.9	54.6				50.6

Jan	2012	53.7	56.5	54.9	55.3				52.2
Feb	2012	51.9	54.9	54.8	52.1				48.4
Mar	2012	53.3	56.8	55.9	55.6				48.0
Apr	2012	54.1	57.6	59.0	56.8				48.7
May	2012	52.5	57.2	54.1	55.9				49.2
Jun	2012	50.2	49.6	52.4	55.7				49.5
Jul	2012	50.5	47.5	53.3	53.2				49.7
Aug	2012	50.7	48.9	48.9	52.6				50.2
Sep	2012	51.6	51.7	51.4	53.7				50.5
Oct	2012	51.7	52.8	53.3	52.3				49.9
Nov	2012	49.9	51.1	53.1	50.1				50.1
Dec	2012	50.2	49.7	52.6	51.9				53.7

*The ISM Manufacturing Inventories Index is no longer seasonally adjusted as of January 2012.

The revised breakeven point for the overall economy is a PMI^™ of 42.2 percent. A PMI^™ over 42.2 percent indicates an expanding overall economy. A PMI^™ below 42.2 percent indicates the overall economy is declining.

Revised Non-Manufacturing Seasonally Adjusted Indexes 2009-2012

		NMI^™	Business Activity	New Orders	Employment	Prices

Jan	2009	43.1	44.1	40.7	36.2	41.6
Feb	2009	41.5	40.6	40.4	37.0	47.6
Mar	2009	40.0	42.8	37.2	31.9	38.7
Apr	2009	43.4	45.0	46.8	36.3	40.3
May	2009	44.2	43.1	45.9	37.9	47.5
Jun	2009	46.8	50.1	49.6	41.5	54.5
Jul	2009	47.0	47.0	49.7	41.3	42.7
Aug	2009	49.1	52.1	51.7	43.4	61.6
Sep	2009	50.5	53.8	53.3	44.7	49.1
Oct	2009	50.9	55.0	55.4	42.6	52.7
Nov	2009	49.3	50.9	54.9	42.8	58.1
Dec	2009	49.9	53.0	51.6	44.6	58.5

Jan	2010	50.2	51.8	52.7	45.8	59.7
Feb	2010	51.7	53.0	53.1	47.1	58.2
Mar	2010	53.2	57.3	57.9	47.9	59.2
Apr	2010	54.8	59.4	57.7	48.6	64.1
May	2010	55.3	61.0	57.8	49.3	60.6
Jun	2010	54.5	59.7	56.3	48.8	58.2
Jul	2010	54.7	57.5	58.5	50.8	57.8
Aug	2010	52.8	56.1	55.0	49.1	60.0
Sep	2010	53.7	53.3	55.3	51.1	59.1
Oct	2010	55.4	60.1	58.4	52.0	67.1
Nov	2010	56.1	58.6	58.8	54.6	64.5
Dec	2010	57.1	62.9	62.0	52.0	68.7

Jan	2011	57.7	61.7	61.9	53.5	70.8
Feb	2011	58.1	63.5	61.7	55.2	71.0
Mar	2011	55.4	58.0	58.9	53.3	69.5
Apr	2011	54.5	56.4	55.7	52.9	71.0
May	2011	54.7	54.7	56.0	54.1	69.1
Jun	2011	53.8	55.1	54.9	53.1	64.0
Jul	2011	53.7	57.0	54.0	53.2	62.8
Aug	2011	54.4	57.1	55.2	52.3	62.0
Sep	2011	52.8	56.6	56.2	48.7	60.8
Oct	2011	53.1	54.3	53.7	52.3	56.8
Nov	2011	52.8	56.0	54.0	51.1	62.2
Dec	2011	52.7	56.3	53.9	49.1	61.4

Jan	2012	56.0	58.7	57.8	56.5	62.3
Feb	2012	56.1	60.3	59.6	54.9	67.9
Mar	2012	55.0	58.4	56.6	55.4	64.3
Apr	2012	53.7	55.2	54.2	53.9	55.9
May	2012	54.1	56.0	55.6	51.8	51.4
Jun	2012	52.7	52.4	54.7	52.7	51.0
Jul	2012	52.9	56.9	55.4	49.9	57.2
Aug	2012	54.3	56.3	55.6	53.9	62.3
Sep	2012	55.2	59.6	57.8	52.0	66.1
Oct	2012	54.8	56.8	56.1	54.8	60.8
Nov	2012	54.8	60.9	58.0	51.4	56.9
Dec	2012	55.7	60.8	58.3	55.3	56.1

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

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 Report On Business^® is published monthly by the Institute for Supply Management™, the first supply institute in the world. 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. Founded in 1915, ISM exists to lead and serve the supply management profession and is a highly influential and respected association in the global marketplace. 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^® — ISM continues to extend the global impact of supply management. ISM's membership base includes more than 40,000 supply management professionals in more than 80 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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