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The Sales Managers' Index: United States

Released: March 17, 2015

U.S. Economic Growth continues to gather pace in March

  • Q1 GDP Growth significantly up on Q4 level
  • Business Confidence at 8 month high
  • Balanced Growth in Manufacturing and Services

The Sales Managers Headline Index indicated continuing growth in the US economy in March, registering a value of 60.4, an increase of 0.8 percentage points on February’s reading. This represents three months of consecutive growth to a level almost certainly up on Q3 2014.

SMI data for March suggests that the rate of GDP growth for Q1 2015 will be greater than the growth seen in Q4 2014 (reported as 2.2% year-on-year in the second estimate by the Bureau of Economic Analysis) and likely to approach 3%.

The Sales Managers’ Index is the first monthly economic activity index released covering all private sectors of the US economy. Sector analysis shows that the March Manufacturing SMI registered 60.6 and the Services SMI registered 60.5. These index values show strong and balanced economic growth in March across both sectors of the economy. A reading above 50 percent indicates that the economic activity is generally expanding; below 50 percent indicates that it is generally contracting.

Continued strong growth has bolstered the optimism of the panellists. The Business Confidence Index remained at a high level of 69.1, up by 0.2 on February’s value. Panellists’ confidence about future business conditions is bolstered by strong and rising growth in new orders. The Market Growth Index, which reflects growth of the general marketplace in panellists’ own industry sectors, registered a very strong value of 62.9 in March, up by 0.9 on the previous month.

The March Product Sales Index registered a value of 57.2, up by 1.4 on the month before and the fourth consecutive rise in monthly values. Strong sales growth is allowing panellists to improve margins by raising prices. The Prices Charged Index rose by 0.6 to record a value of 56.8 in March, the fourth successive rise in the index and the highest value reported since May-14.

Robust growth in sales and prices has resulted in strong employment growth. The Staffing Levels Index, which reflects the number of staff taken on compared to the same period in the last year, recorded a value of 55.7 in March, up by 0.7 on its value in February.

World Economics Chief Executive Ed Jones commented on the release:

“The Headline SMI Index for the US economy in March shows strong balanced growth across both of the main sectors in the US economy. Market and sales growth are strong and panellists continue to raise prices.

However, even though the Staffing Level Index accelerated in March, year-on-year levels slowed a little. Estimates for non-farm payroll data attaining to February & March will likely report a slightly lower rate of growth than seen in the recent January data of 257,000.”


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Notes to Editors
The SMI’s (Sales Managers’ Indexes) are compiled and analysed by World Economics and are based on survey data collected from a panel of over 450 US companies balanced by the all Industry Classification Board (ICB) sectors which are weighted to reflect their contribution to national Gross Domestic Product.

The Sales Managers’ Index results are calculated as
diffusion index which have the characteristics of leading indicators by taking the percentage of respondents that report that 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.

Three month Moving Averages are applied to each index to mitigate the effect of seasonal variations, original un-adjusted data are not revised after publication.

About the Sales Managers’ Indexes

The Sales Managers' Index provide the earliest monthly data on the speed and direction of US economic activity.

Key advantages of the US SMI:
  •   The SMI provides the first indication each month of the speed and direction of economic growth.   
  •   The SMI provides the most complete indication of growth, covering all private sector activity.
  •   The SMI is based on a key occupational group - sales executives - uniquely able to sense accurate changes in business activity levels.

  •  The SMI survey base - salespeople - are used by virtually all businesses, unlike other occupational groups.

  •   The SMI's focus on the world’s growth areas – providing comparative data for Asia, the America's and Africa.

The Sales Managers’ Index has been developed by World Economics, a leading edge provider of original economic data. Sister products include the World Price Index, Global Marketing Index, World Economics Journal, as well as country level Growth Trackers.

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. Its parent company Information Sciences Ltd has a long history of the development of key business information today used throughout the world, including the origination of the Purchasing Managers Indexes in Europe and Asia (now owned by Markit), and the development of WARC a global information provider for major corporations.

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.

© Copyright World Economics Ltd. 2015