The ISM Manufacturing Index (ISM Manufacturing PMI) is a monthly diffusion index derived from surveys of purchasing managers in the U.S. manufacturing sector. Respondents report on key conditions, including new orders, production, employment, supplier deliveries, and inventories; a subset of prices may also be surveyed. The index summarizes current business conditions in a single number on a 0 to 100 scale.
Readings above 50 indicate expansion in manufacturing activity, while readings below 50 signal contraction; a reading of 50 represents no change from the prior month. The index is released by the Institute for Supply Management (ISM) near the start of each month, based on survey responses from hundreds of firms across various manufacturing industries. Subcomponents feed into the overall index and can shed light on drivers of change, such as demand (new orders) or supply chain conditions (supplier deliveries). The data are used by economists, policymakers, and market participants as a timely indicator of current economic momentum and for framing expectations about overall GDP growth and inflation. Because it is survey-based and released monthly, it can move before or with other macro indicators and may be revised in subsequent releases.
The Manufacturing PMI is one piece of a broader set of indicators, including the ISM Non-Manufacturing PMI for services and other output measures; it should be considered in conjunction with other data when assessing economic trends.
For example, a reading of 53.7 in May indicates expansion in manufacturing activity for that month.
PMI (Purchasing Managers' Index) · ISM Non-Manufacturing PMI · Institute for Supply Management (ISM) · Diffusion index · Gross Domestic Product (GDP) · Economic indicators