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2008 Economic Calendar |
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Resource Center » U.S. & Intl Recaps | Release Dates | Why Investors Care | Today's Calendar
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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 11/30/06 For Nov 2006 | ||||||||||||
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Highlights
Chicago purchasers reported flat business activity in November with the main index at 49.9 -- its first sub-50 reading in 3-1/2 years. New orders showed little month-to-month growth, at 52.0 vs. 54.1 in October, while backlog orders showed further contraction at 45.9 vs. 47.5. Employment also contracted, from 57.0 to 49.4 for only its second sub-50 reading in nearly 2-1/2 years.
Data on the supply chain highlight the slowdown. Growth in inventories slowed sharply to 57.7 from 67.2, evidence that purchasers are putting on the brakes. Supplier deliveries showed a dramatic fall, from 54.1 to 43.0 to indicate an absence of delays. The delivery reading is the lowest in 5-1/2 years.
But the slowdown hasn't helped price pressures much at least not yet, as prices paid held at a stubborn 60.2 vs. 62.5 in October. Weakening demand, along with now stable oil prices, should begin to ease up pressures on prices in future months.
The Chicago report, based on responses from the area's non-manufacturing and manufacturing purchasers, is often volatile, but today's results point convincingly to a slowing in business activity -- in not only the Chicago area but by extension through the whole economy. Treasuries firmed in immediate reaction to the results.
The NAPM-Chicago purchasing managers' index decelerated to 53.5 in October from September 62.1 in September. Two factors from the October report point toward continued softness in this index-a slowing in still positive growth in new orders and faster growth in inventories. The market consensus apparently saw the October overall figure as overdone-the series is very volatile-and sees a modest rebound but to a still soft level.
NAPM-Chicago Consensus Forecast for November 06: 55.0
Range: 49.0 to 56.0
![[Chart]](chart.gif)
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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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