Manufacturing ISM for February 2010 - 56.5%

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The Manufacturing ISM index, a survey, was down from last month's 58.4% increase, but still in the black and showing moderate expansion.

The biggest news in this report is employment went up to 56.1% and the trend lines for manufacturing hiring has finally started to move upward. ISM reports this is the highest reading since 2005. The ISM manufacturing employment graph below shows anything below zero (normalized to 50, the contraction/expansion point for the ISM) is contraction and above is expansion. As you can see, we have a manufacturing hiring expansion trend line (finally) from the survey.

 

 

The bad news is new orders went mushy, but is still expanding. Below is the graph of new orders, also normalized to 50 to show the expansion and contraction on new orders.

 

 

Production also sloped downward, but it still positive. Here is industrial production for January 2010.

 

 

MANUFACTURING AT A GLANCE FEBRUARY 2010

Index

 Series
Index
February		 Series
Index
January		 Percent
Point
Change

Direction

 Rate
of
Change		 Trend
(Mon.)
PMI 56.5 58.4 -1.9 Growing Slower 7
New Orders 59.5 65.9 -6.4 Growing Slower 8
Production 58.4 66.2 -7.8 Growing Slower 9
Employment 56.1 53.3 +2.8 Growing Faster 3
Supplier Deliveries 61.1 60.1 +1.0 Slowing Faster 9
Inventories 47.3 46.5 +0.8 Contracting Slower 46
Customers' Inventories 37.0 32.0 +5.0 Too Low Slower 11
Prices 67.0 70.0 -3.0 Increasing Slower 8
Backlog of Orders 61.0 56.0 +5.0 Growing Faster 2
Exports 56.5 58.5 -2.0 Growing Slower 8
Imports 56.0 56.5 -0.5 Growing Slower 6
             
OVERALL ECONOMY Growing Slower 10
Manufacturing Sector Growing Slower 7

 

Recall this is a survey and a relative index, it's not aggregate amounts. The raw report is here.

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fitted graph on ISM emp. vs. BLS manufacturing employment

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Calculated Risk cranked out a correlation graph to the ISM employment index, vs. the BLS manufacturing employment and thus predicts a 22k jobs increase in manufacturing.

 

What is most interesting about this graph is to see the differences before bad trade deals and after bad trade deals. Shame the year break points are not on them specifically and also because we do have some technological advances in manufacturing that will account for less hires, that's also in there...so you cannot extrapolate out more than what CR has done....what's the manufacturing jobs gain estimate for this month....

But, still look at the noise in this thing yet you can see a decline in correlation rates from the two decades (although doing a line fitting curve is in order, this puppy is seriously noisy).

Anywho this is most interesting to see the two decades compared when correlating to the Manufacturing ISM emp. survey data.