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Economy in Brief

Chicago Purchasing Managers Index Posts Surprising Strength
by Tom Moeller  April 30, 2015

Chicago purchasing managers reported that their April Business Barometer Index increased to 52.3, a three-month high, following an unrevised rise to 46.3 in March. The reading exceeded expectations for 49.0 in the Action Economics Forecast Survey. Haver Analytics constructs an ISM-Adjusted Index using the Chicago numbers, comparable to the overall ISM index to be released tomorrow. Our figure strengthened as well to 53.6, its highest level since January. During the last ten years, there has been a 61% correlation between the adjusted Chicago Purchasing Managers index and real GDP growth.

Most of the component series improved this month. The new orders series surged and recouped most of the prior two months' decline. Improvement in the production and order backlog series also was significant. Employment increased as well. During the last ten years, there has been an 82% correlation between the employment figure and the m/m change factory sector employment. The inventories & vendor delivery speed series moved lower.

The index of prices paid declined to the lowest point since the end of the recession in 2009. Eleven percent (NSA) of respondents reported paying higher prices while 22 percent reporting paying 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 with 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) Apr Mar Feb Apr'14 2014 2013 2012
ISM-Adjusted General Business Barometer 53.6 50.9 48.3 58.9 59.4 54.3 54.8
General Business Barometer 52.3 46.3 45.8 62.5 60.7 56.1 54.6
  Production 52.7 49.3 44.8 68.1 64.5 58.3 57.6
  New Orders 55.1 42.3 42.0 67.4 63.8 59.2 55.1
  Order Backlogs 48.5 41.9 41.1 55.0 54.2 48.9 48.0
  Inventories 54.2 58.0 46.7 50.3 56.0 45.7 51.4
  Employment 54.0 50.3 49.8 56.1 56.0 55.6 55.3
  Supplier Deliveries 51.9 54.8 58.3 52.5 56.5 52.5 54.9
  Prices Paid 43.1 45.7 47.8 60.1 61.0 59.9 62.2
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