Econintersect: The Chicago Purchasing Managers Index improved after last month’s largest drop in almost five years.
The Chicago Business BarometerTM increased to 52.3 in July from 51.6 in June, led by gains in Order Backlogs and Supplier Deliveries, more than offsetting a second consecutive monthly decline in both Production and New Orders.
The market was expecting a value of 51.5 versus the reported value of 52.3. A number below 50 indicates contraction.
While still in contraction, Order Backlogs rose in July following a record plunge in June but remain below the average seen over the past year. Supplier delivery times moved back above 50 in July having fallen to a four year low in June.
The remaining three Business Activity measures which make up the Barometer fell between June and July. Production and New Orders declined to the lowest since April, while Employment eased slightly, but remained above the long-run average.
Inventories continued to contract and were at their lowest since November 2009. Prices Paid rose for the third consecutive month to the highest since late 2012.
Commenting on the MNI Chicago Report, Philip Uglow, Chief Economist at MNI Indicators said: “While the Chicago Business BarometerTM ticked higher in July, declines in both Production and New Orders show just how challenging the business environment is.”
The Chicago ISM is important as it is a window into the national ISM reports which will be issued shortly. When you compare the graph below of the ISM Manufacturing Index against the Chicago PMI (graph above) – there is a general correlation in trends, but not necessarily correlation in values.
source and read the full report: Chicago PMI
