1. The Semiannual Economic Forecasts
May 10, 2005
ISM Business Survey Committees

2. Agenda The Manufacturing Sector The Non-Manufacturing Sector
Thomas F. Siems, Ph.D.
Robert Fry, Ph.D.
Q & A

3. The Reports on Business®
Surveying manufacturing since 1931
Over 350 respondents
20 SIC codes
Weighted by contribution to GDP
70 percent response rate
Non-manufacturing started in June 1997

4. Global Report – www.ism.ws/ISMReport

5. Manufacturing Semiannual Forecast Current Operating Rate
Percent of Normal Capacity
April %
Dec %
April %
Manufacturing
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

6. Production Capacity Change
Reported for 2004
Production Capacity Mfg
December %
Predicted for 2005
Production Capacity Mfg
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?
April %
December %

7. Capital Expenditures Predicted 2005 vs. 2004 Capital Expenditures Mfg
April %
December %
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

8. Purchase Price Changes
Reported End 2004 vs. April 2005
Price Changes Mfg
April %
Predicted End 2004 vs. End 2005
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?
Price Changes Mfg
April %

9. Predicted Employment Change
Balance of 2005
Overall Employment Mfg
April %
Dec %
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

10. Business Revenues (nominal)
Predicted 2005 vs. 2004
Business Revenues Mfg
April %
Dec %
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

11. Predicted Change in Business Revenues by Industry
2005 vs. 2004
Manufacturing
Primary Metals
Wood & Wood Products
Transportation & Equipment
Electronic Components & Equipment
Apparel
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

12. PMI 1997-April 2005 What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

13. PMI Annual Average Relative to Midpoint of 50

14. Manufacturing PMI April 2005 Index: 53.3%

15. Manufacturing New Orders April 2005 Index: 53.7%

16. Manufacturing Production April 2005 Index: 56.7%

17. Manufacturing Employment April 2005 Index: 52.3%

18. Manufacturing Supplier Deliveries April 2005 Index: 51.5%

19. Manufacturing Inventories April 2005 Index: 47.9%

20. Manufacturing New Orders - Inventories April 2005: +5.8%

21. Non-Manufacturing Semiannual Forecast Current Operating Rate
Percent of Normal Capacity
April %
Dec %
April %
Non-Manufacturing
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

22. Production Capacity Change
Reported for 2004
Production Capacity Non-Mfg
December %
Predicted for 2005
Production Capacity Non-Mfg
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?
April %
December %

23. Capital Expenditures Predicted 2005 vs. 2004
Capital Expenditures Non-Mfg
April %
December %
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

24. Purchase Price Changes
Reported End 2004 vs. April 2005
Price Changes Non-Mfg
April %
Predicted End 2004 vs. End 2005
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?
Price Changes Non-Mfg
April %

25. Predicted Employment Change
Balance of 2005
Overall Employment Non-Mfg
April %
Dec %
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

26. Business Revenues (nominal)
Predicted 2005 vs. 2004
Business Revenues Non-Mfg
April %
Dec %
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

27. Predicted Change in Business Revenues by Industry
2005 vs. 2004
Non-Manufacturing
Business Services
Mining
Wholesale Trade
Construction
Health Services
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

28. Non-Manufacturing Business Activity
1997- April 2005
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

29. Comparison of PMI and Business Activity
1997- April 2005
What doe this indicator mean?
What industries are affected?
Is this a trend?
Other implications based on monthly report?

30. Non-Manufacturing Business Activity Index Annual Average Relative to Midpoint of 50
1997 July – Dec.; 2005 Jan – Apr.
2004 Average: 62.4%

31. Non-Manufacturing Business Activity April 2005 Index: 61.7%

32. Non-Manufacturing New Orders April 2005 Index: 58.8%

33. Non-Manufacturing Inventories April 2005 Index: 54.5%

34. Non-Manufacturing Employment April 2005 Index: 53.3%

35. Non-Manufacturing Supplier Deliveries April 2005 Index: 53%

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