National Association of Purchasing Managers (NAPM)

Importance: ***

Definition:  The National Association of Purchasing Managers (NAPM) index is a leading indictor of economic activity. It is based on a survey of over 250 companies within twenty-one industries covering all 50 states. Its importance derives form the fact that it is the first indicator each month of manufacturing performance during the past 30-day period and is also a leading indicator of future economic activity and pricing decisions.


Related Indicators:

Source: National Association of Purchasing Managers (NAPM)

Frequency: Monthly

Availability: First working day of the month following the reported period.

Direction:  Pro-cyclical

Timing: Leading indicator

Volatility: Moderate

Likely Impact of Financial Markets:

Ability to Affect Markets: Strong as it is the first indicator providing information about economic activty in the previos month and is also a leading indicator of the business cycle.

Analysis of the Indicator:
The survey covers the six areas:  Production; Orders; Commodity Prices; Inventories; Vendor Performance;  Employment. Participants to the survey are asked to characterize each of these categories as "up", "down", or "unchanged". The calculated index is next seasonally adjusted.  A reading of 50 indicates that conditions are unchanged. A reading over 50 suggests an expanding economy and under 50, a declining economy. The index for the Chicago region is published a day before national index. While the Chicago index is volatile and not a perfect predictor of the national index, it is also an important early leading indicator of economic activity.

Web Links

For more information on this indicator take a look at  The NAPM homepage.

A graph of the latest NAPM Data.

See the Dismal Scientist Homepage for charts, tables and analysis of the latest NAPM report.