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 11/26/08 For Nov 2008 | ||||||||||||
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Highlights
Chicago purchasers report a severe fall off in business in November, adding to a string of very bad economic news. The main index fell 4 points to 33.8 reflecting severe weakness in new orders which fell more than 5 points to 27.2. Backlog orders fell nearly 11 points to 28.2. A small positive, very small, is that month-to-month contraction in production slowed, to 34.3 vs. October's 30.9. Employment fell more than 8 points to 33.4, a reading that will help confirm the worst expectations for next week's monthly employment report.
Prices paid, at 50.7, is the only index over the 50 level that indicates month-to-month growth. But this index, given declines underway in energy and material prices, appears certain to dip below 50 in next month's reading. There was little reaction to the news which points to further declines in next week's ISM reports.
The NAPM-Chicago purchasing managers' index plunged nearly 20 points from a solid 56.7 in September to a deeply recessionary 37.8 in October. Disastrous data on orders point to perhaps deeper lows in the months ahead. The new orders index fell more than 20 points to 32.5 and backlog orders fell nearly 15 points to 39.0. Also falling sharply were production and employment indexes. But on a positive note, economic weakness is translating into lower prices for energy and other commodities as the prices paid index fell nearly 30 points to 53.7.
NAPM-Chicago Consensus Forecast for November 08: 36.5
Range: 32.0 to 41.8
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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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