In September, New York City purchasing managers reported significant short-term improvements in Current Business Conditions and Current Revenues against a drop in Six-Month Outlook, according to the survey taken by the Institute for Supply Management-New York.
Click here to view the full report: 2020_ISM-New_York_September_ROB_v02.pdf
Current Business Conditions gained back the losses reported in August, increasing 13.2 points from 42.9 to 56.1 in September. This is much like the increase reported (and then lost) from May to June. This index reflects the largest change seen in this month's report.
The Six-Month Outlook fell from 61.7 in August to 48.9 in September. This is the continuation of a now 5-month trend of the outlook alternating between the 40s and the 60s, mimicking the feeling one gets while riding the Cyclone on Coney Island. The six-month outlook has been a reliable short-run guide for current business conditions over time.
Employment, a seasonally adjusted index, increased slightly from 38.8 in August to 40.2 in September, remaining below the breakeven point for 7 of the last 8 months.
Quantity of Purchases fell back below the breakeven point reported in August to come in at 46.7 in September. With the exception of the 50.0 reported in August, this month's finding is the highest in just over a year.
Top line and forward revenue guidance moved in opposite directions once again. Current Revenues reached the breakeven point of 50.0 for the first time since February (58.3). With the exception of the decrease reported in August, Current Revenues has increased every month since May. Expected Revenues adjusted downward by 0.4 points in September to reach 42.9.
Prices Paid decreased after two consecutive months of increases, falling to 65.4 in September from the 7-month high of 67.9 reported in August.
September marks the 8th month of Reports with data collected during the time that the COVID-19 pandemic directly affected the U.S. economy. It is also the close of the 3rd quarter for businesses on a traditional calendar year financial schedule. So where are we on each of the indices compared to where we were in January of 2020 – before the virus hit?
Remembering that diffusion indices measure changes in activity (not business activity levels), here is how we currently stack up:
Remember to check back in with me on Tuesday, November 3rd for the release of the October ISM-New York Report on Business. In the meantime, stay healthy and stay safe.
The 2020 Report Release Schedule is as follows:
About the ISM-New York Report on Business
Like ISM’s national report, the ISM-New York Report on Business is compiled as diffusion indices –we add the percent of positive responses to one-half of those responding that conditions remained the same. A reading of 50.0 means no change from the prior month, greater than 50.0 indicates a faster pace of activity, and less than 50.0 a slower rate. Each month is not so much a reading of the current level of activity as it is an indication of growth or contraction from the previous month.
A note specific to the New York Metro area, where all of this report’s respondants are located: they are predominantly in professional services industries. It is important to keep this in mind when we think about the context for the trends being reported by these particular purchasing managers.