Manufactured Improvement

Chart of the Week for September 12-18, 2003

The Institute for Supply Management manufacturing index report for August exceeded expectations. This index is based on surveys of 300 purchasing managers nationwide regarding manufacturing activity. The composite consists of nine similar indexes including; new orders, production, supplier delivery times, backlogs, inventories, prices, employment, export orders, and import orders. Of these nine similar indexes, only employment continues to disappoint. While the complete manufacturing index continues to signal expansion, (any level above 50), the employment portion of the index remains at a contractionary level of 45.9.

The good news is that while the level of manufacturing employment remains low, the overall index continues to expand. However, the ISM Index has shown this type of improvement in the past. From December 2001 through March 2002, the ISM Index also experienced four consecutive monthly increases. Unfortunately the gains proved unsustainable, and the index retreated to lower levels. Hopefully this time will be different and the sector will continue its upward trend.

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