The National Association of Purchasing Management - Chicago compiles a survey and a composite diffusion index of business conditions in the Chicago area. Manufacturing and non-manufacturing firms are both surveyed, but until recently, market players have believed that the survey primarily covers the manufacturing sector. Readings above 50 percent indicate an expanding business sector. The NAPM - Chicago is considered a leading indicator of the ISM manufacturing index. Why Investors Care
| Released on 11/30/07 For Nov 2007 | ||||||||||||
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Highlights
Business activity in the Chicago area showed mild growth in November at an index of 52.9, an improvement from October's nearly dead-flat reading of 49.7. Fortunately, new orders are underpinning activity, at 53.9 for a second straight month and a reading that indicates a bit more respondents are reporting month-to-month improvement vs. month-to-month decline. The production index showed strong month-to-month improvement, up 7.5 points to 57.4, and proved a plus for employment which jumped nearly 5 points to 54.4. A drawdown in inventories, at 47.1 vs. October's 49.6, is also good news, and along with continued contraction in backlogs suggest that businesses in the Chicago are not struggling with inventory overhang. Quickening deliveries are another indication of a healthy supply chain with the supplier delivery index down nearly 7 points to 46.0. Prices paid, pressured by fuel costs, are a negative in the report, showing severe pressure at 76.2, up 1.5 points in the month. There was no reaction to the report which will hold expectations for a flat reading in next week's ISM manufacturing report followed by moderate strength in the ISM non-manufacturing report.
The NAPM-Chicago purchasing managers' index suggested a mild contraction in Chicago area business activity as it fell 4.5 percentage points in October to 49.7 and below the break-even level of 50. Production was further below the break-even 50 level at 46.9 -- down more than 11 points from September. Backlogs orders were well into negative territory, but new orders were still mildly positive.
NAPM-Chicago Consensus Forecast for October 07: 49.7
Range: 48.8 to 50.4
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The NAPM-Chicago Survey registers manufacturing and non-manufacturing activity in the Chicago region. Investors care about this indicator because the Chicago region mirrors the nation in its distribution of manufacturing activity. Consequently, the NAPM-Chicago survey often moves together with the ISM index, but is reported one day in advance. |
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