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Economy in Brief

Chicago Purchasing Managers Index Declines Sharply
by Tom Moeller  October 31, 2016

The Chicago Purchasing Managers Business Barometer Index fell to 50.6 during October following an unrevised increase to 54.2 during September. The latest was the lowest level since May. The figure compared to expectations for 53.8 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 declined to 51.0. During the last ten years, there has been a 61% correlation between the adjusted Chicago Purchasing Managers index and real GDP growth.

The new orders series eased to 52.5 from 54.1, leaving it at the lowest point since May. The production series dropped sharply to 54.4, the weakest level in three months. Inventories & supplier deliveries also fell, but order backlogs improved.

The employment figure also increased to 51.1, and was above break-even for the third month in the last four. During the last ten years, there has been an 81% correlation between the employment figure and the m/m change in factory sector employment.

The prices paid reading rose to 59.5. The figure compared to a February low of 41.1 and was the highest since November 2014. An increased 21% (NSA) of respondents reported paying higher prices while a steady 8% 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 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) Oct Sep Aug Oct '15 2015 2014 2013
General Business Barometer 50.6 54.2 51.5 52.6 50.3 60.7 56.0
ISM-Adjusted General Business Barometer 51.0 53.7 52.5 54.5 51.6 59.3 54.2
  Production 54.4 59.8 52.5 58.3 52.5 64.5 58.2
  New Orders 52.5 54.1 53.9 55.6 50.4 63.8 59.1
  Order Backlogs 44.4 42.3 41.7 45.4 44.4 54.2 48.8
  Inventories 45.9 50.3 49.8 58.7 52.1 55.9 45.6
  Employment 51.1 49.2 53.7 49.5 50.3 56.0 55.6
  Supplier Deliveries 51.2 55.0 52.7 50.4 52.5 56.5 52.5
  Prices Paid 59.5 55.5 54.6 43.9 46.8 61.0 59.8
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