ISM Report on Business - 10/3/12

ISM's Non-Manufacturing Report on Business for September 2012 was released today. NMI, the composite index for Non-Manufacturing, came in at 55.05%, an increase of 1.40 percentage points from August. PMI, the composite index for Manufacturing, was released on Monday and was at 51.5%, an increase of 1.9 percentage points from August. A reading below 50 indicates that the sector is contracting. A reading below 42.6% for PMI indicates that the overall economy is declining. I have averaged the Manufacturing and Non-manufacturing components to create a composite reading.

Below is an interactive graph. You can interact with the graph by choosing what to display. The INDICATOR category contains all 10 areas surveyed as well as the PMI and NMI composites. The choices in the MA/NMA category allow you to view the Manufacturing report (MA), the Non-manufacturing report (NMA), and a composite of the two. The DATES category allows you to view specific periods of time.
 

Here is what some of the Respondents to the surveys are saying: 

Manufacturing 

•  "Appears that our so-called 'slowdown' was a summer thing. September brings with it increasing requirements and business." (Paper Products) 
•  "Business improved through Q3, but is beginning to show signs of slowing down in Q4; this has been a typical trend over the last few years." (Wood Products)
• "Business has picked up going into the last quarter." (Plastics & Rubber Products) 
• "We are sticking to our manufacturing plan, but have slowed production down considerably. Haven't added any new units to the 2012 plan, and still have no forecast for 2013 released." (Computer & Electronic Products)
• "Sales have tanked over the last two months, bringing a very concerned and stressed management team. Not very optimistic for the near-term future." (Apparel, Leather & Allied Products) 
• "Uncertainty in the healthcare legislation (reform) continues to be the underlying force keeping our sales revenue below its full potential." (Miscellaneous Manufacturing) 
• "Steel and aluminum prices still dropping, and auto production orders are up." (Transportation Equipment)
•  "Domestic business is up; international is down." (Electrical Equipment, Appliances & Components) 
• "Demand seems to have stabilized from August. New orders are appearing this month without advanced notice from our customers." (Chemical Products)  

Non-Manufacturing 

• "Business remains steady — optimistic for good fourth quarter." (Information) 
• "Drought is putting pressure on food cost; tourism slowdown over the summer." (Arts, Entertainment & Recreation) 
• "Things feel like the economy is moving. More new small business; unemployment declining; stock market up." (Health Care & Social Assistance) 
• "Economic outlook is improving, but company is putting a major effort into more cost reductions and reorganization, resulting in more collaboration between procurement and our internal customers." (Professional, Scientific & Technical Services) 
• "The general slowdown which began in March showed some reversal in August." (Wholesale Trade)

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Furthermore, these charts have limitations.  Economic data is often revised after the fact.  The market is forward looking and anticipates future events.  The unexpected can and will happen.  The market is continually changing.  The conditions of the past are different from the present.  Past performance is not an indication of future performance.