World Economics - Insight , Analysis and Data

World Economics - Insight , Analysis and Data


The Sales Managers' Index: United States

Released: December 16, 2014

US Business Confidence Upbeat and Rising in December

  • Manufacturing rises to 58.6, Services falls to 58.4.
  • Market growth outpaces sales growth
  • Payrolls growth plateaus

Overview
The Sales Managers’ Index is the first all sector monthly economic activity index release covering the US economy.

The overall Sales Managers’ Headline Index (calculated from an average of the Confidence, Growth, Price and Staffing Indexes) registered a value of 57.9 in December, down by 0.4 on November. The Index has not increased for six successive months although economic activity remains high but a slowly cooling trend is emerging.
              

Real GDP Outlook
The Headline SMI is a leading indicator of business conditions as reported by sales managers across the US economy and as such has a strong relationship with anticipated GDP. On the basis of the past relationship between these two variables and the gentle downward trend of the Headline Index over the past six months the rate of real GDP growth in Q4 2014 is expected to be around 2.6% to 2.7% year on year.


Sector Analysis
Splitting the sample of panellists into Manufacturing and Services illustrated continuing strong growth, although gradually weakening in both sectors of the US economy.

The US Manufacturing Headline SMI for December stood at 58.6, up by 0.5 on November. The US Services SMI registered a value of 58.4, falling by 0.7 on its value the month before. This index has been steadily falling for over six months indicating that although activity in the Services Sector is rising it is doing so at a decreasing rate.


Business Confidence
The Business Confidence Index rose by 0.4 to register a value of 66.7 in December.

This is the second month that the Index has increased indicating that most panellists in the US are becoming increasingly confident about the future economic environment.


Market Growth
The Market Growth Index reflects growth of the general marketplace in panellists’ own industry sectors.

The Market Growth Index for the month registered a value of 58.7 in December, down by 1.0 on the previous month. This is the fourth consecutive month the value of this Index has fallen.


Product Sales
The Product Sales Index represents sales made by panellists’ own companies. The December Index registered a value of 53.7, down by 1.5 on the month before. This is the sixth consecutive month that this Index has declined. Panellists are witnessing a declining in the rate of growth of own companies’ sales which is diverging from their experience of growth in the overall markets in which they operate.


Prices Charged
The Prices Charged Index rose by 0.1 to register a value of 53.9 in December. This marginal rise effectively leaves the index unchanged on the previous month. This is the third consecutive month that this Index has fallen but prices are still gently rising.


Staffing Levels
The Staffing Index reflects the number of staff taken on compared to the same period in the last year.

The Staffing Index value of 56.4 recorded in December was down by 0.3 on November effectively reversing the small increase in its value that month. Despite the month’s fall the trend in employment numbers is for growth at a steadily increasing rate.



Summary
World Economics Chief Executive Ed Jones commented on the release:

“The Headline SMI Index for the US economy in December continues to show strong, but cooling business activity. Panellists in the month reported a continuing divergence between rates of Market Growth and own Company Sales Growth, but falling inflation and rising confidence are resulting in an increasing trend in payroll which only appears to have temporarily paused in December.”






 



















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Amelia Myles, Communications Manager
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F: +44 (0) 20 7326 8351 
E: Amelia.Myles@worldeconomics.com



Methodology
The Sales Managers’ Index results are calculated by taking the percentage of respondents that report that the activity has risen (“Increasing") and adding it to one-half of the percentage that report the activity has not changed (“Unchanged"). Using half of the “Unchanged" percentage effectively measures the bias toward a positive (above 50 points) or negative (below 50 points) index. An example of how to calculate a diffusion index: if the response is 40% “Increasing," 40% “Unchanged," and 20% “Reducing," the Diffusion Index would be 60 points (40% + [0.50 x 40%]). A value of 50 indicates "no change" from the previous month.

The more distant the index is from the amount that would indicate "no change" (50 points), the greater the rate of change indicated. Therefore, an index value of 58 indicates a faster rate of increase than an index value of 53, and an index value of 40 indicates a faster rate of decrease than an index value of 45. A value of 100 indicates all respondents are reporting increased activity while 0 indicates that all respondents report decreased activity. 



About the Sales Managers’ Indexes
The Sales Managers’ Indexes are a series of new products available for Africa, Asia and the Americas, designed to raise the voice and profile of sales people throughout the world. The Sales Managers’ Indexes provide the earliest indication each and every month of the direction of economic activity, and the speed at which its markets are growing.  

Sales Managers are unique as an occupational group in being really at the front line of economic activity. The Sales Manager is ideally placed to feel the first few whispers of caution in the market or to see the new green shoots of economic recovery. 

The Sales Managers’ Index brings together the collective wisdom of Sales Managers and consequently produces the best and earliest source of understanding about what’s really happening in the Chinese economy.  

TThe Sales Managers’ Index has been developed by World Economics, a leading edge provider of original economic data. Sister products include the World Economics Journal, the World Price Index, the Global Marketing Index, as well as the China, India and Eurozone Growth Monitors.


About World Economics
World Economics is an organisation dedicated to producing analysis, insight and data relating to questions of importance in understanding the world economy.

Currently our primary research objective is to encourage and assist the development of better and faster measures of economic activity. In cases where we believe we can contribute directly, as opposed to through highlighting the work of others, we are producing our own measures of economic activity.

Our work is mainly of interest to investors, organisations and individuals in the financial sector and to significant corporations with global operations, as well as governments and academic economists.


 
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guesh
733 days ago
Style now is very good, the information if continuously updated. Thank you




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