ISM Commentary

The ISM manufacturing index was released Monday and the non-manufacturing index was released today.  While each index was above 50, both are still below the peaks reached in 2011 and the non manufacturing index was actually lower than it was last month.  Still, outside of the numbers, the commentary from respondents to each survey is much better than I can recall at any point this cycle, even when the ISM number was higher.  Below are the comments that get paired with the release.  These may be a good precursor to what the tone of earnings calls will be in a couple weeks.

Comments From Manufacturing Survey:


WHAT RESPONDENTS ARE SAYING ...

• "Business is robust, driven by a healthy demand for exports and relatively stable raw materials [pricing]." (Chemical Products)
• "Our customers are reporting a potential 10 percent to13 percent increase in purchases for 2012. Actual orders continue to be slow to appear, but expectations continue to be high." (Machinery)
• "Business conditions [are] very strong and so is outlook." (Fabricated Metal Products)
• "We have been experiencing 6 percent annual growth and expect that to continue in the near term." (Food, Beverage & Tobacco Products)
• "Business continues to be brisk — if not robust — [this] month and looking forward." (Miscellaneous Manufacturing)
• "Business remains essentially stable, with some concerns regarding continued slowdown in China." (Computer & Electronic Products)
• "Business remains strong." (Primary Metals)
• "Business improved year over year for the first quarter." (Plastics & Rubber Products)
• "Generally increasing sales/demand [is] driving higher capacity utilization." (Transportation Equipment)
• "Sales appear to be picking up over last year at this time, but still have a ways to go." (Wood Products)

Comments From Non Manufacturing Survey:


WHAT RESPONDENTS ARE SAYING ...

• "2012 continues ahead of forecasted pace through March." (Wholesale Trade)
• "February was a great month for auto sales — much better than expected. Forecasted sales volumes for the year are being revised upward." (Retail Trade)
• "Positive year-over-year growth is finally being seen as customers' discretionary spend is up, and overall traffic is increasing as well. Increased investments in marketing promotions and advertising during the past few months have helped improve customer loyalty, evidenced by longer stays and increased frequency of visits." (Arts, Entertainment & Recreation)
• "Companies are seeking professional services to continue efficiencies while positioning for growth, when the top line comes back." (Professional, Scientific & Technical Services)
• "We are starting to see the private sector building again; the money is starting to flow into construction." (Construction)
• "Increasing demand for healthcare services while engaging in a more intense effort to reduce costs universally. [We are doing this] prior to implementation of healthcare reform, which is expected to dramatically reduce revenue by approximately 25 percent." (Health Care & Social Assistance)