Global| Jun 30 2015Chicago Purchasing Managers Index Remains Below Break-Even
by:Tom Moeller
|in:Economy in Brief
Summary
Chicago purchasing managers reported that their June Business Barometer Index improved to 49.4 during June following an unrevised decline to 46.2 in May. It was fourth month in the last five below 50, the break-even point between [...]
Chicago purchasing managers reported that their June Business Barometer Index improved to 49.4 during June following an unrevised decline to 46.2 in May. It was fourth month in the last five below 50, the break-even point between rising and falling business activity. It disappointed expectations for 50.0 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 deteriorated to 48.5, the third month below 50 this year. During the last ten years, there has been a 61% correlation between the adjusted Chicago Purchasing Managers index and real GDP growth.
The production series improved slightly, as did new orders. Both remained above the recovery low. Moving the other way, the employment reading declined sharply to the lowest level since November 2009. During the last ten years, there has been an 82% correlation between the employment figure and the m/m change factory sector employment. The order backlog and inventory readings also fell sharply. Finally, the vendor deliveries series fell, indicating the fastest rate of product delivery in two years.
The index of prices paid improved to the highest level in six months. A higher 21 percent (NSA) of respondents paid higher prices, more than an increased 17 percent which 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) | Jun | May | Apr | Jun'14 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| ISM-Adjusted General Business Barometer | 48.5 | 48.8 | 53.6 | 60.5 | 59.4 | 54.3 | 54.8 |
| General Business Barometer | 49.4 | 46.2 | 52.3 | 63.5 | 60.7 | 56.0 | 54.7 |
| Production | 49.8 | 45.8 | 52.7 | 69.6 | 64.5 | 58.2 | 57.6 |
| New Orders | 51.7 | 47.5 | 55.1 | 66.0 | 63.8 | 59.0 | 55.2 |
| Order Backlogs | 41.0 | 47.3 | 48.5 | 56.7 | 54.2 | 48.8 | 48.1 |
| Inventories | 46.9 | 53.3 | 54.2 | 56.4 | 56.0 | 45.7 | 51.4 |
| Employment | 45.7 | 48.0 | 54.0 | 57.1 | 56.1 | 55.5 | 55.4 |
| Supplier Deliveries | 48.5 | 49.5 | 51.9 | 53.6 | 56.5 | 52.5 | 54.8 |
| Prices Paid | 53.3 | 51.2 | 43.1 | 64.5 | 61.0 | 59.8 | 62.3 |
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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