Ism Manufacturing Index
The Index of Manufacturing Industry (IMI) is a measure of the overall health of the manufacturing sector in a country. It is a composite indicator that incorporates data on various factors including:
Key Components:
- New Orders: This component reflects the level of new manufacturing orders received by manufacturers. It is a key indicator of future production activity.
- Manufacturing Hours: This component measures the number of hours that manufacturers are operating their facilities. It is an indicator of production capacity utilization.
- Factory Orders: This component tracks the number of orders for the production of goods in the current month. It is an indicator of demand for manufactured goods.
- Finished Goods Inventory: This component measures the level of finished goods inventory held by manufacturers. It is an indicator of supply and demand balance.
Formula:
The MIM is calculated using the following formula:
IMI = 100 - ((100 - New Orders Index) / 2) + (100 - Manufacturing Hours Index) / 2 + (100 - Factory Orders Index) / 2 + (100 - Finished Goods Inventory Index) / 2
Interpretation:
The MIM is a valuable tool for monitoring the overall health of the manufacturing sector. It provides a snapshot of the sector’s current performance and can be used to forecast future trends. A high MIM indicates a strong manufacturing sector, while a low MIM indicates a weakened sector.
Additional Considerations:
- The MIM is typically published monthly by government agencies or private research organizations.
- The MIM is usually seasonally adjusted to remove irregular fluctuations.
- The MIM is a key indicator of economic growth and can be used to gauge the overall health of a country’s economy.
Here are some additional resources on the Index of Manufacturing Industry:
