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Economy in Brief

Chicago Purchasing Managers Index Strengthens
by Tom Moeller  September 29, 2017

The Chicago Purchasing Managers Business Barometer for September rose to 65.2 following two months at 58.9. It was the highest level in three months and well improved versus 54.0 twelve months ago.  A slip to 58.5 had been expected in the Action Economics Forecast Survey.

Based on these figures Haver Analytics constructs an index that is comparable to the ISM Composite index, to be released Monday. This figure rose to 61.3 from 55.7. It was the highest level since June and up from 52.9 last September. During the last ten years, there has been a 63% correlation between the index and the q/q change in real GDP.

The component series each improved m/m. The new orders series increased moderately but the backlog of unfilled orders reading surged to the highest level since 1988. The supplier delivery index rose and roughly indicated the slowest product delivery speeds since 2011, reflecting intense storm activity. Production improved moderately.

The employment index strengthened to the highest level in three months. Twenty percent (NSA) of respondents indicated an increase in hiring while ten percent reported a decline. During the last ten years, there has been an 81% correlation between the index level and the m/m change in factory sector payrolls.

The prices paid index surged to the highest level since July 2011. Forty six percent (NSA) of respondents reported paying higher prices while five 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. 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) Sep Aug Jul Sep '16 2016 2015 2014
General Business Barometer 65.2 58.9 58.9 54.0 53.1 50.3 60.7
ISM-Adjusted General Business Barometer 61.3 55.7 58.0 52.9 52.0 51.6 59.3
  Production 63.3 61.9 60.8 57.5 54.7 52.5 64.5
  New Orders 67.5 61.2 60.3 55.0 55.7 50.4 63.8
  Order Backlogs 65.3 54.7 57.9 42.6 47.4 44.4 54.2
  Inventories 56.9 48.5 54.9 48.7 47.2 52.1 55.9
  Employment 56.0 47.5 52.6 49.2 49.4 50.3 56.0
  Supplier Deliveries 62.6 59.3 61.5 54.1 52.8 52.5 56.5
  Prices Paid 74.3 58.9 60.9 55.8 53.1 46.8 61.0
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