Which monthly survey by the Institute for Supply Management tracks economic activity in the U.S. manufacturing sector?

The monthly Institute for Supply Management survey tracking U.S. manufacturing activity is the ISM Manufacturing Index.

Today, ISM generally brands the release as the ISM Manufacturing PMI, or Purchasing Managers’ Index. It is based on monthly responses from supply-management professionals at manufacturing companies, with the panel structured around industries’ contributions to U.S. gross domestic product. The report is released on the first business day of each month and is closely watched because it arrives earlier than many official production statistics.

The headline index is a diffusion index. Readings above 50 generally indicate that manufacturing is expanding compared with the previous month, while readings below 50 indicate contraction. The composite uses five equally weighted components: New Orders, Production, Employment, Supplier Deliveries, and Inventories, with seasonal adjustment applied to several of them.

The name can cause confusion because ISM publishes a separate Services PMI and because the Industrial Production Index is a government measure of actual output. The ISM survey measures reported changes in business conditions and sentiment, making it a timely indicator rather than a direct count of factory production.