The Institute for Supply Management's Purchasing Managers' Indexes are diffusion indices: readings above 50 indicate expansion, below 50 contraction. Manufacturing PMI leads goods-freight cycles; Services PMI leads last-mile and consumer-economy freight.
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The Institute for Supply Management's Purchasing Managers' Index is a diffusion index built from monthly surveys of supply executives. A reading above 50 indicates expansion, below 50 contraction. Manufacturing PMI foreshadows industrial and goods freight; Services PMI foreshadows consumer-economy freight. Truck dealers use sustained PMI direction to time inventory and order flow.
A manufacturing PMI that crosses above 50 typically precedes a three-to-six-month rise in dry van and flatbed tonnage, as producers rebuild inventory and ship more finished goods. Crossing below 50 anticipates a corresponding softening. Services PMI correlates with last-mile, refrigerated, and retail distribution freight.
For long-haul truckload and flatbed demand, Manufacturing PMI leads. For last-mile, reefer, and urban distribution, Services PMI is the better read. The broader U.S. economy is roughly 70% services and 30% goods, so Services PMI drives macro sentiment while Manufacturing PMI drives trucking-specific cycles.
Manufacturing PMI is published on the first business day of each month (covering the prior month). Services PMI follows on the third business day. Both are among the earliest forward-looking data points available in a given month, which is why financial markets react sharply to them.
Rising Manufacturing PMI through 50 signals improving freight demand, firming used truck values, and a good moment to ramp inventory acquisition. Declining Manufacturing PMI through 50 warns of soft freight, rising days-on-lot, and the need to tighten acquisition budgets. Two consecutive months in one direction is typically enough to act on.