Econintersect: The Chicago Purchasing Managers Index declined marginally after four months in a row of gains.
The Barometer might be down in November, but this was another impressive month with companies reporting firm growth
The market was expecting a value of 58.0 versus the reported value of 63.0. A number below 50 indicates contraction.
The November Chicago Business Barometer softened to 63.0 after October’s sharp rise to a 31-month high of 65.9. November’s slight correction came amid mild declines in New Orders, Production and Order Backlogs after double digit gains in the prior month.
Despite November’s weakening, the Barometer remained well above 60 for the second month, pushing the three month moving average to the highest level since November 2011.
Chicago area purchasers continued to report healthy expansion in New Orders and Order Backlogs, albeit at a slower rate, as well as a lengthening in Supplier Delivery Times.
Employment was up for the second consecutive month, reaching the highest level since October 2011, and the first time above 60 since February 2012.
Inventories exploded 13.1 points to 61.1, moving out of contraction for the first time since February and posting the highest reading since September 2006. With expectations for higher demand, firms underwent a major stock rebuild.
Commenting on the MNI Chicago Report, Philip Uglow, Chief Economist at MNI Indicators said:
“Having kept inventories lean for so long, a pick-up in demand has led to a sharp rise in stock building among the companies in our panel. And to handle the latest production and new orders boost, companies are hiring at the fastest pace for two years,” he added.
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
