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 2/28/07 For Feb 2007 | ||||||||||||
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Highlights
The Chicago Purchasers' index fell to 47.9 in February vs. 48.8 in January, a sub-50 reading indicating contracting conditions in the area's business activity. New orders were weak, 48.7 vs. 46.3, as were backlog orders, at 44.3 vs. 46.4. These readings point to continued weakness ahead.
A spike in inventories was especially bad news, rising to 54.5 vs. 41.9. Given the decline in orders, the reading suggests that supply managers have not been able to liquidate stocks in the face of slowing demand. Other readings included a rise in prices paid, 63.2 vs. 54.9, which probably won't cause much concern given the downturn in overall activity.
Financial markets showed no significant reaction to the report, but it will be interesting to see if the inventory reading is repeated in the coming ISM manufacturing and non-manufacturing reports. Inventory overhang may yet be an important risk should economic growth begin to slow significantly.
The NAPM-Chicago purchasing managers' index fell to 48.8 in January from 51.6 in December. Weakness was led by a sharp 10 percentage point fall in new orders to 46.3 that points to slowing activity in the months ahead. Backlogs improved marginally but remained in negative territory.
NAPM-Chicago Consensus Forecast for February 07: 50.0
Range: 48.5 to 52.0
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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. |
| 2007 Release Schedule | ||||||||||||||||||||||||||
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