Growth and Activity Data

ISM vs S&P Global PMI

Two surveys of the same economy that regularly disagree, and how to use both.

advanced · 4 min read · 12 XP

The United States is surveyed twice. The ISM and S&P Global PMIs cover the same economy in the same month and can point in opposite directions for a year at a time. This is not a data error — the two surveys are built differently, and knowing how lets you use the disagreement instead of being confused by it.

Two surveys, one economy

ISM S&P Global (formerly Markit)
Publisher Institute for Supply Management S&P Global
Coverage United States only Harmonised across ~40 countries
Panel Skews towards large, established firms Broader, includes more small and mid-sized firms
History Long, back to the mid-20th century Shorter for the US
Manufacturing release First business day of the month, 10:00 New York Flash ~23rd, final first business day
Services release Third business day, 10:00 New York Flash ~23rd, final third business day

Both are diffusion indices around 50. Both survey purchasing managers. They still disagree.

Why they disagree

Panel composition. ISM's respondents skew large. When large exporters and small domestic firms face different conditions — a strong dollar, a tariff change, a credit squeeze that hits smaller borrowers first — the two surveys diverge structurally rather than randomly.

Question weighting. The two use different sub-index weights to build their headline, so the same underlying responses produce different composites.

Seasonal adjustment. Different methodologies, applied to volatile monthly data, produce persistent gaps.

Timing. The S&P Global flash lands around the twenty-third of the month it describes; ISM lands on the first business day of the following month. They are not sampling identical windows.

Use the disagreement

A divergence between the two is itself a signal about which part of the economy is under stress. ISM weaker than S&P Global points to problems concentrated in large firms — often export-facing, and therefore a dollar-strength story or a global-demand story. S&P Global weaker than ISM points to stress among smaller domestic businesses, which is more often a credit or domestic-demand story. Neither survey is "right"; they are describing different populations.

Which one moves the market more

For the US, ISM Services is the highest-impact of the four, followed by ISM Manufacturing. The S&P Global flash gets attention mostly as the first read of the month and because it is comparable internationally.

Two ISM-specific quirks worth carrying:

ISM Manufacturing's neutral level is not 50 for the economy. Because manufacturing is a small share of US output, the long-run relationship between ISM Manufacturing and overall GDP growth puts the "zero growth" equivalent well below 50 — conventionally cited around the low-to-mid 40s. A manufacturing ISM of 47 is a contracting sector, not a contracting economy, and headlines routinely conflate the two.

ISM Prices Paid is a genuine market mover. It is one of the earliest monthly inflation signals available, arriving before CPI for the same month, and it can move the rate market on its own.

USD/JPY at 15:00 GMT on ISM services day — one of the higher-impact US releases outside the big three

The 10am release time

ISM lands at 10:00 New York, ninety minutes after the equity open and well after the 8:30 data window. Liquidity is good but positioning is already set for the session, and an ISM surprise frequently reverses the morning's move. It is a common source of intraday whipsaw for anyone who established a view at 8:30.

ISM Manufacturing prints 46 and the headlines call it a contraction. Should the dollar sell off?

Not on that basis alone. A 46 print says the manufacturing sector is contracting; it does not say the economy is. Because the sector is a small share of output, the ISM level historically consistent with zero overall growth sits well below 50. Check ISM Services in the same week, which covers far more of the economy, and check the ISM prices and employment sub-indices for the rate implications. A weak manufacturing print alongside firm services is a familiar and market-tolerated combination.

What it means for the currency

  • ISM Services above consensus → dollar support, and the largest of the four surveys' typical impact.
  • ISM Prices Paid surprise → moves rate expectations directly, sometimes more than the headline does.
  • A widening ISM–S&P divergence → not a trade in itself, but it tells you where the stress sits and improves your reading of everything else.

What to remember

  • The US is surveyed twice: ISM is US-only with a large-firm panel, S&P Global is internationally harmonised with broader coverage.
  • Divergence between them locates the stress — large exporters versus small domestic firms — rather than indicating an error.
  • ISM Services is the highest-impact of the four; ISM Prices Paid is an early inflation signal in its own right.
  • ISM Manufacturing below 50 means a contracting sector, not a contracting economy.

ISM and S&P Global survey the same US economy with different panels, weights and timing, so they routinely disagree — and the disagreement usefully locates whether stress sits with large exporters or smaller domestic firms. ISM Services is the highest-impact of the four releases, ISM Prices Paid is an early inflation signal, and an ISM Manufacturing print below 50 indicates a contracting sector rather than a contracting economy.

← All lessons