Econintersect: The Chicago Purchasing Managers Index again declined marginally after last month’s decline.
The moderation in December was led by a second month of slippage in New Orders and declines in four of the five components that comprise the Barometer.
The market was expecting a value of 58.0 to 65.0 versus the reported value of 59.1. A number below 50 indicates contraction.
The December Chicago Business Barometer softened to 59.1 from 63.0 in November, the second consecutive monthly decline following October’s surge to 65.9, the highest since March 2011.
In spite of December’s slowdown, the Barometer continued to point to reasonably firm growth and the three month average rose to the highest since May 2011.
Chicago area purchasers continued to report an expansion in business activity, albeit at a slower rate in New Orders, Production and Order Backlogs. Employment fell significantly to just above 50 in December
Supplier Deliveries, the only component of the Barometer to expand at a faster rate, rose to the highest since June 2011. An ongoing lengthening in Supplier Deliveries was a concern among purchasers in December as it was viewed as a possible harbinger to continued growth. Philip Uglow, Chief Economist at MNI Indicators said,
The Chicago Business Barometer finally turned a corner in 2013 having been in decline for the previous two years and ended the year with fourth quarter growth at the highest for more than two years. While activity dipped a little in December, businesses continued to report firm growth in Production and New Orders.
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