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Monday, March 6, 2023

The ISM PMI had been contracting for 4 consecutive months already.

Estimated new local order = New orders (+4.5) - New export orders (+0.5) = 4
Estimated local raw material = Inventories (-0.1) - Imports (+2.1) = -2.2

The increase in the PMI was caused by a significant increase in new orders which included new local orders.  However, the producers were not optimistic about their future orders and went ahead to cut back on their production, employment and inventories which resulted in an increase in the backlog of orders.

The ISM PMI had been in the contractionary phase (below 50) for 4 consecutive months and this phenomenon won't bode well for the future US economic growth.

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