The National Association of Purchasing Managers (NAPM) index is the Who’s Who of manufacturing activity of the past month, compiled by none other than the Institute of Supply Management (ISM). It’s mincing words, but the ISM used to be the NAPM—they rebranded. So the NAPM Index is sometimes now called the ISM Report on Business.
The ISM Report on Business...the NAPM Index...whatever you want to call it, is based on a monthly survey of 250+ companies in 21 industries across the U.S. The survey asks manufacturers about their business: their sales, their outlook, and more. Potential answers are: up, down, or unchanged. Add up everyone’s answers, add some weights for expected changes in seasonality, and voila: the NAPM Index.
50 is the fulcrum point in the NAPM Index. 50+ means manufacturing is expanding, under 50 means declining, and 50 exactly...means unchanged compared to last month.
