ISM Commodities Surveys

by: Bespoke Investment Group

In each month's ISM Manufacturing and Non Manufacturing reports, respondents to the survey are asked whether or not they are seeing an increase or decrease in the prices of commodities they deal with. In this month's survey, there was a notable divergence between commodity prices depending on which sector of the economy a business is involved in.

The chart below shows the three month average of the net number of commodities rising in price within the manufacturing sector. In the latest ISM report on Business (ROB) for the Manufacturing sector, respondents noted that they saw price increases in seven commodities and decreases in two. As a result, the average net number of commodities rising in price over the last three months has risen to 4.7, but still remains in a downtrend from its highs in early 2011.

Click to enlargeIn the Non Manufacturing sector, however, we have seen a faster pace of increases in commodity prices. In this month's report, 24 commodities saw price increases, while only five saw declines. This works out to a net of 19, representing four straight months of increases and the highest monthly reading since April (31). Over the last three months, the average net number of commodities rising in price within the Manufacturing sector rose to 13.3, or nearly three times the pace of increases within the Manufacturing sector.

Click to enlarge