I have monthly data for each of the 18 sectors in the ISM PMI.
Each datapoint shows the trend of a sector: growing, contracting or neutral.
It also tells the strength of that trend with a number:
"Growing 1" is the sector that shows the mosts growth in that month.
"Contracting 1" is the sector that has the biggest contraction in that month.
Neutral always has the number 0.
So, for example, if you'd have to list a number of sectors from biggest growth to biggest contraction, it would be:
Sector A: Growth 1 (==> biggest growth)
Sector B: Growth 2
Sector C: Growth 3
Sector D: Growth 4
Sector E: Neutral 0
Sector F: Contraction 3
Sector G: Contraction 2
Sector H: Contraction 1 (==>biggest contraction)
My goal is to be able construct a chart like this,
which shows the underlying trend of a sector (dashed line):
The dashed line represents the underlying trend of the ISM "Computer & Electronic Products" sector. It's the ISM sector's ranking on a 1 to -1 scale and ran through seasonal decomposition (left hand scale).
The way I see it, it's a 3-part problem:
1. Ranking: For each month, the sectors need to be ranked (biggest growth to biggest contraction) and get a ranking number.
2. Scaling: Put the ranking number on a 1 to -1 scale
3. Seasonal decomposition: For each sector ("Computer & Electronic Products" in the example chart), you have a datapoint for each month.This constitutes a time series, which can be used for seasonal decomposition to discover the actual trend.
However, for each of these 3 steps, I don't how to perform the calculations.
Who can provide tips or examples on how to accomplish this please?
Should you need data to work with, I have put an excel with monthly data of all the ISM Manufacturing Sectors as of January 2008 here: https://goo.gl/IUuaj2