ISM Manufacturing Prices

The ISM Manufacturing Prices Index is the Prices part of the Institute for Supply Management Manufacturing PMI Report. It tracks input prices paid by factories for raw materials. The Manufacturing Business Survey Committee runs the panel of purchasing leaders reporting for United States operations across 18 industries.

Industries group by standard classification with weights tied to output share. Each panelist reports higher, same, or lower prices from the previous month. Answers form a diffusion index. Readings above 50% show broadening increases while readings below show broadening falls.

The gauge stands outside the 5 part headline composite. It never measures price levels in dollars or inflation rates. It measures breadth of change across respondents, not size of change.

Surveys go to panelists early each month for activity in that month. Most replies arrive late in the month, which sharpens the picture of business activity. ISM posts the report on its site after 10:00 Eastern on the first business day of the following month. One cycle in each calendar shifts by one business day.

Each release carries the headline index with remaining parts, commodity lists, industry quotes, and buying lead times. Responses are raw data and are never changed. Math uses unrounded values. Prices takes no seasonal smoothing, so history stays final on release.

Prices has no weighted parts and no weight in the headline index, so readers watch listed detail.

• Commodities Up in Price: materials more panelists report costing more, with consecutive month counts.
• Commodities Down in Price: materials more panelists report costing less, with consecutive month counts.
• Commodities in Short Supply: items hard to source, which can pressure input costs.
• Largest industries reporting increases: the 6 biggest manufacturing industries paying more, showing breadth.
• Respondent quotes: industry comments linking moves to energy, metals, components, or freight.

One published example reached 87.1%, up 11.5 points from 75.6%, after 22 straight months of broadening increases. The split was 75.1% higher, 24.0% same, and 0.9% lower, for a net of 74.2.

The chair linked faster expansion to instability in global energy markets, with aluminum, copper, petroleum products, stainless steel, and freight elevated. A separate published reading was 45.2%, down 4.7 points from 49.9%, with crude oil, diesel, natural gas, and resins down.

Collection groups one answer per panelist for the reference month against the previous month.

• Collect responses: each panelist reports higher, same, or lower input prices.
• Form shares: answers become higher, same, and lower percentage shares.
• Compute net: subtract the lower share from the higher share. Take shares of 40 higher, 45 same, and 15 lower. Net equals 40 minus 15, which is 25.
• Compute index: add the higher share plus 0.5 times the same share. The index equals 40 plus 0.5 times 45, which is 62.5.
• Weight and finalize: industry answers carry output share weights, math uses unrounded values, and Prices takes no seasonal smoothing, so history stays final.

Key point: a high reading never means prices rose by that percent. It blends headcounts across respondents and says nothing about dollars.