The ISM Manufacturing Index is projected to increase to 51.3 (moderately above a neutral 50.0 reading) in tomorrow’s update for July, based on The Capital Spectator’s average econometric forecast. The estimate reflects a slight rise from the previously reported 50.9 for June. The Capital Spectator’s average projection is below several consensus forecasts that are based on surveys of economists.

Here’s a closer look at the numbers, followed by brief summaries of the methodologies behind The Capital Spectator’s projections:

VAR-1: A vector autoregression model that analyzes the history of industrial production in context with the ISM Manufacturing Index. The forecasts are run in R with the “vars” package.
VAR-6: A vector autoregression model that analyzes six economic time series in context with the ISM Manufacturing Index. The six additional series: industrial production, private non-farm payrolls, index of weekly hours worked, US stock market (S&P 500), spot oil prices, and the Treasury yield spread (10 year Note less 3-month T-bill). The forecasts are run in R with the “vars” package.
ARIMA: An autoregressive integrated moving average model that analyzes the historical record of the ISM Manufacturing Index in R via the “forecast” package.
ES: An exponential smoothing model that analyzes the historical record of the ISM Manufacturing Index in R via the “forecast” package.