About a week ago I received an interesting email from reader Steve Kline Jr.

Kline is Director of Market Intelligence at Gardner Business Media, Inc., a B2B media company that conducts surveys similar to the ISM.  

Steve writes … 

 Hello Mish 

I own B2B media company that published trade magazines for manufacturing since 1928. Since 2006 we have conducted our own monthly survey that functions just like the ISM index. 

We get about 500 responses a month from all kinds of durable goods manufacturers. So, it’s a little more narrowly focused than the ISM. But, we don’t seasonally adjust the data. And, I’ve noticed over time that the Fed tends to revise capacity utilization data to reflect the changes in our backlog index. The Fed usually does this six to 12 months after the fact. 

Basically, in every industry we track there is an accelerating contraction over the last four to five months. Most indices are at their lowest point since late 2012.

We do this for metalworking, plastics, composites, and a couple other processes. The metalworking index started in December 2006. The others started in December 2011. There are far more metalworking facilities in durable goods manufacturing than facilities in the other industries. The index can also be broken down by industries (aerospace, automotive, medical, etc.), region of the country, and plant size. We’re working on a data visualization in Tableau for this.

I’ll put a chart together of the ISM and our index (may take some time as I’m headed to Taiwan for a presentation on the state of American manufacturing.) I will say that one of the participating companies in the ISM has said our index is a better representation of their business than the ISM, particularly over the last two years or so (perhaps due to the seasonal adjustments of the ISM). It is an industrial supplies company.

Steve

In a followup Email Steve wrote …