ISM Manufacturing Index

The ISM Manufacturing Index (ISM), formerly known as the Purchasing Managers Index (PMI), measures manufacturing activity based on a monthly survey, conducted by the Institute for Supply Management. A very important and trusted economic indicator, ISM monitors changes in production levels from month to month, that can greatly influence investor and business confidence as purchasing managers are in the best position to assess the ebb and flow of business conditions. This index shows economic information such as employment and new orders, helping investors to better understand overall economic conditions. An ISM manufacturing PMI number above 50 indicates the manufacturing sector is expanding, which means the economy is growing and stocks will most likely increase in value. An ISM manufacturing PMI number below 50 indicates the manufacturing sector is contracting, which means the economy is contracting and stocks will most likely decrease in value.