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Economy in Brief

Chicago Purchasing Managers Index Dips; Inventories Surge
by Tom Moeller  September 30, 2014

Chicago purchasing managers indicated that their September Business Barometer Index fell to 60.5 this month but remained higher than the year-ago level of 56.3. The reading fell short of expectations for 62.0 in the Action Economics Forecast Survey. Haver Analytics constructs an ISM-Adjusted Index, comparable to the overall index to be released tomorrow. The figure improved to 63.2, the highest level since April 2011. During the last ten years, there has been a 62% correlation between the adjusted Chicago Purchasing Managers index and real GDP growth.

Despite the decline in the overall index, the inventories series jumped to 70.8, the highest level since a surge in 1973. Also moving higher was the supplier delivery index (64.1) indicating the slowest product delivery speeds since April 2011. Finally, the employment reading of 56.2 was up just slightly but remained below the July high. To the downside was the production barometer (64.9) as it reversed much of its August rise. Also falling was the new orders reading (60.0), roughly equaling the year-ago level, and the order backlog series (52.5).

The index of prices paid increased 67.2, its highest level since November 2012. Thirty five percent (NSA) of respondents reported paying higher prices while four percent paid less.

The MNI Chicago Report is produced by MNI/Deutsche Borse Group in partnership with ISM-Chicago. The survey covers a sample of over 200 purchasing professionals in the Chicago area with a monthly response rate of about 50%. The ISM-Adjusted headline index is calculated by Haver Analytics using these data to construct a figure using the ISM methodology. The figures can be found in Haver's SURVEYS database. The Consensus expectations figure is available in AS1REPNA.

Chicago Purchasing Managers Index (%, SA) Sep Aug Jul Sep'13 2013 2012 2011
ISM-Adjusted General Business Barometer 63.2 63.0 54.9 54.2 54.3 54.8 61.3
General Business Barometer 60.5 64.3 52.6 56.3 56.1 54.6 62.7
  Production 64.9 74.7 51.4 58.1 58.3 57.6 66.6
  New Orders 60.0 65.6 55.7 59.8 59.3 55.1 65.3
  Order Backlogs 52.5 58.3 45.2 48.4 49.0 48.0 55.5
  Inventories 70.8 61.2 54.3 45.3 45.7 51.4 55.2
  Employment 56.2 55.9 59.8 54.3 55.5 55.3 59.5
  Supplier Deliveries 64.1 57.6 53.1 53.4 52.5 54.9 60.0
  Prices Paid 67.2 60.2 59.0 58.9 59.9 62.2 72.4
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