What is the ISM Manufacturing PMI?

The ISM Manufacturing PMI Report is a monthly survey of purchasing and supply executives at U.S. manufacturers. The Manufacturing PMI is a composite of the diffusion indexes for New Orders, Production, Employment, Supplier Deliveries and Inventories, with equal weights. The panel is stratified by NAICS industry and weighted by each industry's contribution to GDP, and respondents report on U.S. operations.

Supplier Deliveries is the only index in the ISM PMI Reports that is inversed, so a reading above 50 percent means slower deliveries. Prices is reported but is not one of the five indexes in the Manufacturing PMI. The publisher treats 50 percent as the line between expansion and contraction of the manufacturing economy and 47.5 percent as the level above which the overall economy is generally expanding.

Production facts:

  • Publisher: Institute for Supply Management
  • Frequency: Monthly
  • Typical release time: 10:00 a.m. ET on the first business day of the month (second in January)
  • Primary metric: Manufacturing PMI
  • Market sensitivity: Very High
  • Data type: Soft data
  • Economic indicator type: Leading
  • Revision risk: Low

Key components to watch

The headline (Manufacturing PMI) is the most widely quoted but rarely the most informative number. The components that follow reveal whether the headline result is broad-based or concentrated, improving or deteriorating, and consistent with prior trends.

  • New Orders
  • Production
  • Employment
  • Supplier Deliveries
  • Inventories
  • Prices

For any release with multiple components, the investor's task is not to memorize every number but to identify which components are most relevant to the current investment thesis and track those with the most care.

How to read the headline: actual versus expected

Markets react to the gap between the published Manufacturing PMI and the consensus forecast, not to the level alone. A stronger-than-expected or weaker-than-expected result is defined against that forecast, so check what was expected before reading the number.

The ISM Manufacturing PMI carries low revision risk, so the figure published at release is the one to compare with the forecast and with the previous period.

Market impact by asset class

The ISM Manufacturing PMI primarily affects the following markets: Stocks, Industrials, Materials, Treasuries, USD, Commodities.

Stronger than expected result: In an inflation-elevated, tightening environment, a stronger result typically pressures interest-rate-sensitive assets and can strengthen the dollar. In a growth-slowing environment, a stronger result can be equity-supportive if it reduces recession fears.

Weaker than expected result: In a growth-concern environment, a weaker result may reinforce concerns about economic deceleration. If the Fed is watching this specific indicator for policy calibration, a persistent pattern of below-consensus results may shift the rate path.

In-line result: In-line results typically produce muted market reactions unless there are significant component deviations from expectations. The market had already priced the consensus, so confirmation requires little repricing.

Revision risk and methodology notes

The ISM Manufacturing PMI carries low revision risk. Survey responses are raw data and are never changed. The Manufacturing PMI, New Orders, Production, Employment and Inventories are seasonally adjusted, and the publisher says all seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them.

Primary source: Institute for Supply Management: ISM Manufacturing PMI. Release calendar: Institute for Supply Management schedule.

Publisher documents read for this page:

Common investor mistakes

  • Reacting to the headline without checking the components. The headline can diverge significantly from the underlying trend revealed by the components. A headline beat driven by a volatile component may not indicate the same strength as a broad-based improvement.
  • Ignoring revisions to prior periods. An initial strong number revised down in the following release tells a different story than a number that stands firm.
  • Not knowing what is consensus-priced. Reacting to a number without knowing what was already expected conflates information with noise. The market reaction is driven by the deviation from expectations, not by the level of the number.
  • Applying the same interpretation across different regimes. The same headline result has different implications depending on the Fed's current stance, the growth trend, and what is already priced into the yield curve and equity multiples.

Related releases

The ISM Manufacturing PMI should be read alongside:

  • ISM Services PMI
  • S&P Global US Manufacturing PMI
  • S&P Global US Services PMI
  • S&P Global US Composite PMI
  • Industrial Production and Capacity Utilization

Frequently asked questions

What is the ISM Manufacturing PMI?

The ISM Manufacturing PMI Report is a monthly survey of purchasing and supply executives at U.S. manufacturers. The Manufacturing PMI is a composite of the diffusion indexes for New Orders, Production, Employment, Supplier Deliveries and Inventories, with equal weights. The panel is stratified by NAICS industry and weighted by each industry's contribution to GDP, and respondents report on U.S. operations. It is published monthly by Institute for Supply Management.

When is the ISM Manufacturing PMI released?

The ISM Manufacturing PMI is released by Institute for Supply Management on a monthly schedule: 10:00 a.m. ET on the first business day of the month (second in January). Exact dates are on the publisher's release calendar.

How does the ISM Manufacturing PMI affect markets?

The ISM Manufacturing PMI primarily affects Stocks, Industrials, Materials, Treasuries. Its typical market sensitivity is rated Very High. A result that comes in stronger than consensus expectations generally moves affected markets directionally, while a weaker result can have the opposite effect. The direction depends on the current macro regime and what is already priced into markets.

What is the revision risk for the ISM Manufacturing PMI?

The ISM Manufacturing PMI carries low revision risk. Survey responses are raw data and are never changed. The Manufacturing PMI, New Orders, Production, Employment and Inventories are seasonally adjusted, and the publisher says all seasonal adjustment factors are subject annually to relatively minor changes when conditions warrant them.