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Economy in Brief

Chicago Purchasing Managers Index Remains Near Two-Year High
by Tom Moeller  March 31, 2017

The Chicago Purchasing Managers Business Barometer Index improved to 57.7 in March after strengthening to 57.4 in February. The latest figure was the highest since January 2015. The March reading exceeded expectations for 56.8 in the Action Economics Forecast Survey. Readings above 50 indicate growth, while those below 50 show declines in activity levels.

Haver Analytics constructs an ISM-Adjusted Index using the Chicago numbers, comparable to the overall ISM index to be released Monday. The Haver figure eased to 57.2, and remained the highest since December 2014. During the last ten years, there has been a 61% correlation between this adjusted Chicago Purchasing Managers index and real GDP growth.

The production series improved to its highest point since January 2016. The new orders series rose moderately, but the inventories series showed accumulation at the quickest rate in two years. The order backlog series rose modestly as did the supplier delivery series, indicating slower product delivery speeds.

The employment index reversed most of its February improvement. A lessened 18% (NSA) of respondents reported higher payroll levels while an increased 22% reported them lower. During the last ten years, there has been a 74% correlation between the employment index and the m/m change in nonfarm payrolls.

The prices paid barometer eased, but remained near the highest level since September 2014. Thirty-six percent of respondents paid higher prices compared to 9% one year earlier. Six percent paid lower prices compared to 15% one year earlier.

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. Summary data are contained in Haver's USECON database, with detail, including the ISM-style index, in the SURVEYS database. The Consensus expectations figure is available in AS1REPNA.

Chicago Purchasing Managers Index (%, SA) Mar Feb Jan Mar '16 2016 2015 2014
General Business Barometer 57.7 57.4 50.3 53.1 53.1 50.3 60.7
ISM-Adjusted General Business Barometer 57.2 57.6 50.0 51.0 52.0 51.6 59.3
  Production 61.7 60.3 56.0 53.1 54.7 52.5 64.5
  New Orders 60.4 59.2 49.1 55.4 55.7 50.4 63.8
  Order Backlogs 49.6 49.0 45.6 49.3 47.4 44.4 54.2
  Inventories 60.5 58.4 43.1 45.7 47.2 52.1 55.9
  Employment 49.1 57.1 46.5 52.2 49.4 50.3 56.0
  Supplier Deliveries 54.4 52.8 55.1 48.4 52.8 52.5 56.5
  Prices Paid 64.7 68.6 61.4 46.6 53.1 46.8 61.0
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