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Economy in Brief

Chicago Purchasing Managers Index Strengthens in March
by Tom Moeller  March 31, 2016

Chicago purchasing managers reported that their March Business Barometer Index jumped to 53.6, after declining to 47.6 in February. The latest reading beat expectations for a smaller rise to 49.4 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 increased to 50.8, but has been moving sideways for a year. During the last ten years, there has been a 61% correlation between the adjusted Chicago Purchasing Managers index and real GDP growth.

A higher employment figure helped the overall index rebound as it jumped to the highest level since April 2015. 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 production & new orders measures increased. The order backlog reading strengthened to the highest level since January 2015. The inventories figure continued its sideways movement, but the supplier deliveries measure fell to nearly a three year low.

The index of prices paid recovered to the highest level in three months, but on balance still indicated falling prices. Nine percent (NSA) of respondents paid higher prices while 15 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 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) Mar Feb Jan Mar '15 2015 2014 2013
ISM-Adjusted General Business Barometer 50.8 46.7 52.4 52.7 51.6 59.3 54.2
General Business Barometer 53.6 47.6 55.6 49.3 50.3 60.7 56.0
  Production 53.7 44.0 62.5 51.5 52.5 64.5 58.2
  New Orders 55.6 51.7 58.8 44.7 50.4 63.8 59.1
  Order Backlogs 49.7 45.3 47.2 44.3 44.4 54.2 48.8
  Inventories 44.0 43.1 42.7 60.9 52.1 55.9 45.6
  Employment 52.8 45.2 48.9 51.7 50.3 56.0 55.6
  Supplier Deliveries 48.1 49.7 49.2 54.8 52.5 56.5 52.5
  Prices Paid 45.1 41.1 43.7 48.4 46.8 61.0 59.8
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