ISM Manufacturing Index is used to track the shifts in output rates on a monthly basis and is reported in the ISM Manufacturing Report. This report is an essential part of analysing the stock markets and understanding the economic patterns in the country.
This is used across various segments based on the North American Industry Classification System (NAICS) and is measured against the share of US GDP across each industry in the country. The index is calculated by assigning equal weightage to key components like fresh orders, inventories, supply estimates, imports, employment, production, etc. the market conditions can be seen to be directly correlated to the ISM Manufacturing Index. If the index value increases the market forms bullish conditions and vice versa.
