Global| Mar 31 2017Chicago Purchasing Managers Index Remains Near Two-Year High
by:Tom Moeller
|in:Economy in Brief
Summary
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 [...]
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 |
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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