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World Economics - Measuring Global Economic Activity

The Sales Managers' Index: United States

Released: July 22, 2014

Economic activity strong, but slowing in July

  • Market and Sales Indexes high, but easing back
  • Prices rise, but no trend increase in inflation evident
  • Jobs growth decelerates

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

The overall Sales Managers’ Headline Index for July registered a value of 60.8, down by 0.6 on June (calculated from an average of the Confidence, Growth, Price and Staffing Indexes). This indicates that panellists see rising economic activity, but that the rate of growth has eased back slightly.

Gross Domestic Product (GDP)
The Headline SMI Index is an economic indicator which can represent forthcoming changes in GDP. The relationship between SMI data and annualised real GDP on a Quarter-on-Quarter basis (QoQ) is shown in the chart opposite. The SMI Headline Index for Q2 2014 is suggesting a sharp bounce back for Q2 GDP after the unexpected -2.9% real contraction (after statistical revisions) in Q1 2014.

Business Confidence
The Business Confidence Index fell by 0.7 from June to register a still very high value of 70.5 in July. This is the second consecutive monthly fall in the Index.

Despite the correction to previous rises in the index, the level still indicates that most panellists are still very confident that business conditions will improve in the coming months.

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

Sales Managers’ report that overall Market Growth in July remained strong, but the rate of growth eased back with the Index value falling by 0.9 to reach 62.2. This decline ended a run of six months of successive growth in the index value.

Product Sales
The Product Sales Index represents sales made by panellists’ own companies. The July Index registered a value of 60.4, down by 0.5 on June, indicating that panellists are seeing their own companies’ sales rising, but like the Market Growth Index the current reading indicates that the rate of growth may have peaked after six months of steady increases.

Prices Charged
The Prices Charged Index rose slightly by 0.1 to register a value of 56.0 in July. Prices are rising, but the month on month change over the last quarter recorded by panellist has been effectively flat indicating no trend rise in the rate of price increase.

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

The Index value of 54.9 in July is down by 0.8 on its June level. This is the first fall after three monthly rises showing that panellists are continuing to increase staffing levels but that the rate of increase decelerated at the start of Q3.

World Economics Chief Executive Ed Jones commented:

"Business Confidence in the US continues to slip marginally. Market and sales growth remain high, but a short-term peak has been reached. Prices are rising, but the month-on- month change has been volatile and payrolls are still rising, but the rate of increase is decelerating.”


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Notes to Editors
The Sales Managers’ Index is produced by World Economics and is based on original survey data collected from a panel of Sales managers in all sectors of the US economy except those controlled by the Government.

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’ Index
The Sales Managers’ Indexes are a set of unique economic activity reports covering a wide range of sectors and industries (except those controlled by Government) in over 70 countries worldwide. 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 economy. 

The 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, and Country Growth Trackers.

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

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