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

TEMPE, Ariz.-(Business Wire)-January 21, 2009 - 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 2009 ISM Manufacturing Report On Business^®, which is scheduled to be released on February 2, 2009, and the January 2009 ISM Non-Manufacturing Report on Business^®, which will be released on February 4, 2009.

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 (2009).

The X12-ARIMA program was used to develop the revisions to the indexes for 2005 through 2008 as well as the 2009 projected seasonal factors for Manufacturing. For the Non-Manufacturing Report, these indexes have been revised from 2005 through 2008 also. The 2009 seasonal factors will be recomputed when the actual data are known in early 2010. Projected seasonal factors for 2009 and revised seasonally adjusted indexes are shown below.

2009 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 2009	0.949	0.919	0.937	0.972	1.014
February 2009	1.043	0.993	0.996	0.964	1.026
March 2009	1.057	1.004	1.014	0.997	1.024
April 2009	1.081	1.078	1.047	1.002	1.027
May 2009	1.057	1.065	1.049	1.025	1.002
June 2009	1.056	1.048	1.033	1.017	1.007
July 2009	1.003	1.002	1.009	1.039	0.970
August 2009	0.978	1.009	1.013	1.007	1.048
September 2009	1.004	1.059	0.995	1.025	0.976
October 2009	0.940	0.963	0.979	0.993	0.991
November 2009	0.945	0.969	0.975	0.988	0.957
December 2009	0.885	0.890	0.952	0.971	0.957

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

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

2009 Seasonal Adjustment Factors for ISM Non-Manufacturing Indexes

	Business Activity	New Orders	Employment	Prices

January 2009	0.916	0.926	0.944	0.954
February 2009	0.970	0.970	0.965	0.966
March 2009	1.042	1.004	0.991	1.062
April 2009	1.084	1.086	1.053	1.099
May 2009	1.085	1.093	1.078	1.088
June 2009	1.064	1.060	1.038	1.042
July 2009	0.987	0.998	1.048	1.030
August 2009	0.975	1.002	0.966	0.927
September 2009	0.962	0.959	0.971	0.974
October 2009	0.978	0.971	0.948	0.952
November 2009	0.987	0.980	0.997	0.960
December 2009	0.950	0.950	1.001	0.946

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 2005-2008

	PMI	New Orders	Production	Employment	Supplier Deliveries	Inventories

Jan 2005	56.6	58.2	59.1	58.7	54.1	52.7
Feb 2005	54.8	55.8	58.2	56.0	54.7	49.1
Mar 2005	54.9	57.3	57.4	53.6	53.1	53.2
Apr 2005	52.5	54.8	56.4	51.8	51.7	47.8
May 2005	51.0	52.1	54.7	49.0	50.8	48.2
Jun 2005	52.6	55.6	55.3	51.0	53.1	48.2
Jul 2005	54.0	58.7	58.8	53.3	52.0	47.0
Aug 2005	51.6	55.8	54.3	51.8	50.5	45.5
Sep 2005	56.5	61.0	60.2	53.0	58.2	50.2
Oct 2005	57.2	60.6	61.9	54.3	61.2	48.1
Nov 2005	56.5	59.6	61.0	56.0	57.1	48.6
Dec 2005	54.9	60.2	60.3	53.8	52.7	47.5

Jan 2006	54.8	59.4	59.3	53.3	55.2	46.7
Feb 2006	55.4	61.1	58.6	54.0	53.1	50.4
Mar 2006	54.5	58.4	58.5	53.3	53.8	48.4
Apr 2006	56.0	57.5	59.5	54.9	57.2	50.7
May 2006	53.6	53.5	55.8	53.0	57.2	48.4
Jun 2006	52.3	55.7	53.6	49.6	55.0	47.5
Jul 2006	53.0	54.8	55.7	50.6	54.7	49.4
Aug 2006	53.0	54.1	54.3	52.3	55.1	49.4
Sep 2006	51.8	54.5	54.5	49.0	53.4	47.8
Oct 2006	51.0	52.7	52.8	49.9	50.8	48.6
Nov 2006	50.0	49.8	49.2	49.3	52.8	49.1
Dec 2006	52.2	53.8	54.8	50.1	53.3	49.0

Jan 2007	49.4	51.9	51.7	50.7	52.6	39.9
Feb 2007	51.9	55.2	55.1	51.7	52.0	45.7
Mar 2007	51.1	52.1	54.7	49.3	51.6	47.6
Apr 2007	52.8	58.2	56.8	52.7	50.2	46.0
May 2007	52.5	57.6	56.4	52.3	50.2	46.0
Jun 2007	52.9	58.2	60.4	51.4	49.6	44.9
Jul 2007	51.9	56.8	54.2	49.6	51.0	48.0
Aug 2007	50.6	54.4	54.2	49.3	50.4	44.7
Sep 2007	50.5	54.0	54.3	50.7	51.0	42.3
Oct 2007	50.2	53.2	49.7	51.3	50.8	46.2
Nov 2007	50.4	52.8	51.9	48.4	51.7	47.3
Dec 2007	49.1	47.6	49.9	48.7	53.4	46.1

Jan 2008	50.8	48.9	55.7	47.9	53.1	48.3
Feb 2008	48.8	48.9	51.3	47.0	51.2	45.8
Mar 2008	49.0	47.1	49.6	49.3	53.7	45.3
Apr 2008	48.6	46.4	49.3	45.8	53.8	47.8
May 2008	49.3	48.6	50.4	46.2	53.2	48.0
Jun 2008	49.5	49.3	49.9	44.1	54.5	49.8
Jul 2008	49.5	44.9	52.0	51.0	54.1	45.4
Aug 2008	49.3	48.2	51.3	48.0	50.5	48.4
Sep 2008	43.4	39.2	41.0	40.9	51.8	44.0
Oct 2008	38.7	32.4	33.6	34.2	49.3	44.0
Nov 2008	36.6	28.1	32.0	34.3	48.6	40.1
Dec 2008	32.9	23.1	26.3	29.9	45.7	39.6

The revised breakeven point for the overall economy is a PMI of 41.2 percent. A PMI over 41.2 percent indicates an expanding overall economy. A PMI below 41.2 percent indicates the overall economy is declining.

Revised Non-Manufacturing Seasonally Adjusted Indexes 2005-2008

	NMI	Business Activity	New Orders	Employment	Prices

Jan 2005		61.1	62.1	53.7	68.6
Feb 2005		61.2	63.0	58.9	70.0
Mar 2005		61.7	61.9	57.2	66.1
Apr 2005		59.2	57.2	53.3	63.8
May 2005		58.1	58.3	51.9	56.8
Jun 2005		61.3	59.1	56.7	60.3
Jul 2005		61.0	61.9	55.5	68.5
Aug 2005		64.8	64.6	60.8	68.3
Sep 2005		55.4	57.8	55.6	78.8
Oct 2005		59.1	58.1	54.0	76.3
Nov 2005		58.9	60.0	57.1	71.2
Dec 2005		59.9	62.2	56.2	67.2

Jan 2006		57.6	57.6	52.7	69.3
Feb 2006		61.2	57.8	57.4	68.5
Mar 2006		60.5	60.0	54.9	60.8
Apr 2006		61.7	60.8	56.4	70.0
May 2006		58.3	58.0	55.2	70.0
Jun 2006		57.0	56.9	52.6	71.7
Jul 2006		55.8	56.3	54.0	72.9
Aug 2006		56.8	52.2	52.8	74.3
Sep 2006		54.9	58.1	53.0	57.2
Oct 2006		57.1	55.8	52.3	54.0
Nov 2006		58.7	57.2	52.1	55.7
Dec 2006		56.2	54.3	52.5	59.0

Jan 2007		57.6	56.3	52.7	56.5
Feb 2007		55.1	56.1	52.2	55.4
Mar 2007		53.5	54.6	51.8	63.0
Apr 2007		56.3	54.7	51.1	63.4
May 2007		58.0	55.8	53.1	63.3
Jun 2007		60.7	56.8	55.2	64.2
Jul 2007		56.3	53.2	51.5	61.6
Aug 2007		55.6	55.6	48.8	60.9
Sep 2007		55.2	53.9	52.5	65.2
Oct 2007		55.7	55.8	52.6	65.9
Nov 2007		54.8	52.2	51.2	74.4
Dec 2007		53.5	52.3	51.4	71.7

Jan 2008	44.6	41.6	44.2	43.5	71.2
Feb 2008	49.7	51.0	50.5	47.1	70.1
Mar 2008	49.9	52.6	50.6	47.3	71.1
Apr 2008	51.9	51.2	50.2	50.0	72.2
May 2008	51.2	52.9	52.4	48.3	75.6
Jun 2008	48.8	50.7	48.7	45.2	82.1
Jul 2008	49.6	50.1	48.0	46.8	78.8
Aug 2008	50.4	50.8	49.5	45.6	74.1
Sep 2008	50.0	51.5	50.6	44.2	70.6
Oct 2008	44.6	44.5	44.3	41.7	53.3
Nov 2008	37.4	33.3	35.6	31.1	37.0
Dec 2008	40.1	38.9	38.9	34.5	36.1

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 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 40,000 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).