Monday, June 02, 2014

ISM Correction: ISM Manufacturing index increased in May to 55.4

by Calculated Risk on 6/02/2014 02:16:00 PM

Note: The ISM made a seasonal adjustment error in their release this morning. The index was corrected twice, and is now reported to have increased to 55.4%, not decreased to 53.2% as was initially reported.

The ISM manufacturing index suggests faster expansion in May than in April. The PMI was at 55.4% in May, up from 54.9% in April. The employment index was at 52.8%, down from 54.7% in March, and the new orders index was at 56.9%, up from 55.1% in April.

From the Institute for Supply Management: May 2014 Manufacturing ISM® Report On Business® CORRECTION

ISM® has discovered an error in its software programming for calculating the May 2014 Manufacturing PMI® that was released at 10 a.m. ET this morning.

“We apologize for this error. We have recalculated and confirmed that the actual index indicates that the economy is accelerating,” said Bradley J. Holcomb, CPSM, CPSD, chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. “Our research team is analyzing our internal processes to ensure that this doesn’t happen again,” he added.

The May PMI® registered 55.4 percent, an increase of 0.5 percentage point from April’s reading of 54.9 percent, indicating expansion in manufacturing for the 12th consecutive month. The New Orders Index registered 56.9 percent, an increase of 1.8 percentage points from the 55.1 percent reading in April, indicating growth in new orders for the 12th consecutive month. The Production Index registered 61.0 percent, 5.3 percentage points above the April reading of 55.7 percent. Employment grew for the 11th consecutive month, registering 52.8 percent, a decrease of 1.9 percentage points below April’s reading of 54.7 percent. The Supplier Deliveries Index registered 53.2 percent, 2.7 percentage points below the April reading of 55.9 percent. Comments from the panel reflect generally steady growth, but note some areas of concern regarding raw materials pricing and supply tightness and shortages.”
emphasis added
ISM PMIClick on graph for larger image.

Here is a long term graph of the ISM manufacturing index.

This was close to expectations of 55.5%.