• Last month ISM surprised on the upside with a strong reading of 48.9 up from June’s reading of 44.8. The improvement in the overall index was driven by the solid increases in the sub components such as New Orders and Production, while the Inventory index remained low.
• Most of the local indices have this month shown increases in the overall indices. Furthermore the sub components Production, New Orders and Employment rose in almost all local indices. The price indices have increased compared to last month.
• Tomorrow we expect to see ISM break the important 50 level with a reading of 51, which is slightly above the consensus expectation.
• Going forward we still expect to see improvements in production in order to stabilize inventories and meet the pent up demand. We expect that the speed and the magnitude of the manufacturing recovery will surprise during H2 of 2009
