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Economy in Brief

Chicago Purchasing Managers Index Declines Again
by Tom Moeller  August 31, 2016

The Chicago Purchasing Managers Business Barometer Index declined to 51.5 during August following an unrevised fall during July to 55.8. The figure compared to expectations for 54.4 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 Monday. Our figure fell to 52.5, its lowest level in three months. 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 fell to 52.5 after a decline to 54.6, and the new orders index declined to 53.9 from 59.3. The order backlog measure collapsed to 41.7, down versus a high of 59.7 two months earlier. The inventory index also fell to 49.8 from 52.0, and the supplier delivery series eased to 52.7, indicating slightly faster product delivery speeds.

The employment figure continued upward to 53.7, its highest level since April of last year. During the last ten years, there has been an 80% correlation between the employment figure and the m/m change in factory sector employment.

The prices paid reading eased to 54.6, but remained up sharply versus the February low of 41.1. A lower 14% (NSA) of respondents reported paying higher prices while a lessened 7% 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) Aug Jul Jun Aug '15 2015 2014 2013
General Business Barometer 51.5 55.8 56.8 52.9 50.3 60.7 56.0
ISM-Adjusted General Business Barometer 52.5 54.2 52.9 54.4 51.6 59.3 54.2
  Production 52.5 54.6 56.3 56.7 52.5 64.5 58.2
  New Orders 53.9 59.3 63.2 54.7 50.4 63.8 59.1
  Order Backlogs 41.7 56.2 59.7 45.5 44.4 54.2 48.8
  Inventories 49.8 52.0 50.0 58.7 52.1 55.9 45.6
  Employment 53.7 52.2 45.0 49.2 50.3 56.0 55.6
  Supplier Deliveries 52.7 53.1 50.0 52.7 52.5 56.5 52.5
  Prices Paid 54.6 55.1 55.7 47.6 46.8 61.0 59.8
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