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The February 2021 ISM-New York Report on Business: Another Down Month


In February, New York City purchasing managers reported significant drops in Current Business Conditions and Employment, according to the survey taken by the Institute for Supply Management-New York. The full report can be downloaded here: pdf2021_ISM-New_York_February_ROB_v1.pdf


Report Rundown

Current Business Conditions decreased by 15.7 points to a 9-month low of 35.5 in February (referencing the 19.5 reported in May of 2020). This finding is down from 51.2 in January, a level that represented a loss of 10.1 points.

The Six-Month Outlook fell for the second month in a row, officially ending the pattern of 20-point swings up and down. In February, the outlook fell 1.8 points to 51.5, a 3-month low that just managed to stay above the breakeven point. The six-month outlook has been a reliable short-run guide for current business conditions over time.

Employment, a seasonally adjusted index, fell 19.5 points from 60.6 in January to 41.1 in February. This is the biggest mover in this month's report and marks a 3-month low.

Quantity of Purchases nudged downward in February, moving from an 8-month low of 35.7 to a 9-month low of 35.3.

Top line and forward revenue guidance both fell in February. Current Revenues fell for the second month in a row, reaching an 8-month low of 35.3 (referencing the 30.6 reported in June of 2020). Expected Revenues fell 10 points to reach 47.1 in February, a 5-month low (referencing the 42.9 reported in September of 2020).

Prices Paid rose for the fourth consecutive month, increasing 5.1 points from 71.4 in January to a 30-month high of 76.5 in February (referencing the 78.6 reported in August of 2018).


Additional Commentary

We’ve seen a lot of wild swings in the Report over the last few months, with individual indices changing by high teens and twenties from one report to another. Because they changed so rapidly and then changed back again, I believe those indices weren’t measuring business activity as much as they were measuring degrees of uncertainty. We have had very few multi-month trends, which has made analyzing the report very difficult. But it also kept things exciting – and each month there was the hope that either the highs would stick around, or the lows would swing back the following month. We didn’t need to linger too long on any one number.

Now we seem to be stuck – or stabilizing, depending on your perspective. For the last two months, the report has been what I (non-scientifically) categorize as a ‘worst-case scenario:’ everything down except prices. Spoken like a true procurement pro, right?

In considering what to cover in my additional commentary this month, it occurred to me that a focus on the forward-looking indices – six-month outlook and expected revenue – should be a source of interesting observations. And they did not disappoint.

Six-Month Outlook

If we just consider the 12-month period displayed in the monthly report, the first thing you notice are the crazy swings. But there are some other interesting details as well. Despite the fact that outlook has been down for 2 consecutive months, neither month is all that far from the rate of growth reported in February of 2020, right before the pandemic hit. In fact, both January and February are in growth territory – not by much – but above the 50.0 breakeven point. I’d rather have a confident 51 than a frantic 62.0 any day of the week. Even if outlook stays where it is now in March – low growth territory – I would take it as a welcome sign of stability.

Expected Revenues

Although it is not in the name of the index, expected revenues also looks six months into the future. That means that when we combine outlook with expected revenues, we get insight into what the New York metro purchasing managers think business conditions are going to be in six months and also how healthy they expect their firm’s top line to be. We only display 7 months’ worth of data for this index in the report, so I went back to my source data to look at the same 12-month period as considered for the outlook.

Since February 2020, expected revenues has only been above the breakeven point 4 times: February 2020, October 2020, December 2020, and January 2021. It has been far more stable than outlook, and while the news hasn’t been great, it has been steady – which suggests I higher degree of certainty. And that makes sense – procurement professionals have more firsthand knowledge about their own company than they do the local economy. The fact that 3 of the last 5 months have been in growth territory, and the other two months have been in the high 40s, suggests to me that it won’t be long before this index is above breakeven every month. There is still a delay, as in February we’re assessing revenue levels for August, but better times and top line growth are on the horizon.

Please join me on April 5th for the release of the March 2021 ISM-New York Report on Business.


The 2021 Report release schedule is as follows:

January 5

February 2

March 2

April 5 (Good Friday)

May 4

June 2

July 2

August 3

September 2

October 4

November 2

December 2


About the ISM-New York Report on Business

Like ISM’s national report, the ISM-New York Report on Business is compiled as diffusion indices –we add the percent of positive responses to one-half of those responding that conditions remained the same.  A reading of 50.0 means no change from the prior month, greater than 50.0 indicates a faster pace of activity, and less than 50.0 a slower rate. Each month is not so much a reading of the current level of activity as it is an indication of growth or contraction from the previous month.

A note specific to the New York Metro area, where all of this report’s respondants are located: they are predominantly in professional services industries. It is important to keep this in mind when we think about the context for the trends being reported by these particular purchasing managers.

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