Global| May 29 2015Chicago Purchasing Managers Index Moves Below Break-Even
by:Tom Moeller
|in:Economy in Brief
Summary
Chicago purchasing managers reported that their May Business Barometer Index declined to 46.2 during May following an unrevised rise to 52.3 in April. It was the third figure in the last four months below 50, the break-even point [...]
Chicago purchasing managers reported that their May Business Barometer Index declined to 46.2 during May following an unrevised rise to 52.3 in April. It was the third figure in the last four months below 50, the break-even point between rising and falling activity. It also was nearly the lowest reading of the economic expansion and disappointed expectations for 53.0 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 Monday. Our figure deteriorated as well to 48.8, after just two months above 50. During the last ten years, there has been a 61% correlation between the adjusted Chicago Purchasing Managers index and real GDP growth.
Deterioration in the component series was all-inclusive this month. The production series returned to nearly its lowest level of the recovery, as did the employment reading. During the last ten years, there has been an 82% correlation between the employment figure and the m/m change factory sector employment. The new orders figure fell below break-even as did vendor delivery speeds which indicated the quickest delivery speeds in just over two years. Inventories accumulated at a slightly slower rate.
The index of prices paid recovered to the highest point this year. A slightly higher 16 percent (NSA) of respondents paid higher prices but a sharply lower 10 percent reporting paying less, the least since December.
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) | May | Apr | Mar | May'14 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| ISM-Adjusted General Business Barometer | 48.8 | 53.6 | 50.9 | 59.6 | 59.4 | 54.3 | 54.8 |
| General Business Barometer | 46.2 | 52.3 | 46.3 | 61.9 | 60.7 | 56.1 | 54.6 |
| Production | 45.8 | 52.7 | 49.3 | 65.0 | 64.5 | 58.3 | 57.6 |
| New Orders | 47.5 | 55.1 | 42.3 | 70.8 | 63.8 | 59.2 | 55.1 |
| Order Backlogs | 47.3 | 48.5 | 41.9 | 59.6 | 54.2 | 48.9 | 48.0 |
| Inventories | 53.3 | 54.2 | 58.0 | 54.7 | 56.0 | 45.7 | 51.4 |
| Employment | 48.0 | 54.0 | 50.3 | 54.8 | 56.0 | 55.6 | 55.3 |
| Supplier Deliveries | 49.5 | 51.9 | 54.8 | 52.7 | 56.5 | 52.5 | 54.9 |
| Prices Paid | 51.2 | 43.1 | 45.7 | 65.7 | 61.0 | 59.9 | 62.2 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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