INSTITUTE OF SUPPLY MANAGEMENT (ISM)

• Importance: High
• Frequency: Monthly
• Source: Institute of Supply Management
• Release Time: 10:00 ET on the first business day of the month for the prior month.
• Raw Data Available At: www.instituteforsupplymanagement.org/

The ISM report (previously NAPM) is a national survey of purchasing managers which covers such indicators as new orders, production, employment, inventories, delivery times, prices, export orders, and import orders. Diffusion indexes are produced for each of these categories, with a reading over 50% indicating expansion relative to the prior month, and a sub-50% reading indicating contraction. Readings below 43-44% are normally associated with a recession.

The total index is calculated based on a weighted average of the following five sub-indexes, with weights in parentheses: new orders (30%), production (25%), employment (20%), deliveries (15%), and inventories (10%).

ISM is one of the first comprehensive economic releases of the month, typically preceding the employment report. Though it covers only the manufacturing sector, it can often provide accurate hints regarding the tone of subsequent releases. During periods of inflation concerns, the prices paid and vendor deliveries indexes often determine the bond market’s reaction to the report.