August Manufacturing Survey down but above expectations

By Edward Harrison On Sep 1, 2011

The August 2011 Manufacturing ISM Report On Business® fell to 50.6% in the data released earlier today. I had expected a reading below 50 which would mean the manufacturing sector was subtracting from GDP growth. But the numbers were above 50 and well above consensus expectations.

Note that the ISM states its PMI manufacturing index needs to be below 42.5 percent, over a period of time, before one could assume a contraction of the overall economy. And we are not close to that point as yet.

In the chart above I highlighted the three key points: new orders and production are contracting while inventories are growing. So, overall, I would consider this a weak report that also exhibited soft forward-looking sub-components.

Economic Data manufacturing

Edward Harrison 7783 posts 575 comments

Edward Harrison is a senior Editor at Bloomberg. He is also the founder of Credit Writedowns newsletter, a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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