Economy
Chicago PMI Falls 7.5 Points
Written by Sandy Williams
November 30, 2015
The Chicago Business Barometer, or Chicago PMI as it is commonly called, fell 7.5 points in November to 48.7. A decline in new orders put the Index back into contraction for its sixth time this year.
The index, an indicator of business demand in the Chicago area, has been volatile throughout 2015 giving less credence to monthly declines or spikes. New orders fell 15.3 points to 44.1 after a reading of 54.9 in October.
Production fell sharply in November after soaring nearly 20 points in October. The production index settled just above contraction last month, reversing most of October’s gain.
Backlogs were relatively unchanged remaining in contraction for the tenth month. Employment and Supplier delivery indexes increased slightly and remained above the 50 neutral point.
Inventories dropped in November with the index falling sharply below 50 after increasing significantly in October. Of those surveyed, 44 percent still thought inventories were too high while 54 percent said they were about right.
Prices paid declined again in November, remaining in contraction for the fourth consecutive month.
Chief Economist of MNI Indicators Philip Uglow said, “That the Barometer was unable to hold on to the gain seen in October is a reflection of the erratic pattern of demand seen throughout 2015. The slowdown in the global economy, the strong dollar and decline in oil prices have all impacted businesses this year to varying degrees.”
“While it looks likely that the Fed will begin to raise rates in December, the latest setback supports the case for a gradualist approach to monetary tightening.
MNI says barring a bounceback in December, overall activity in fourth quarter has slowed.
The Chicago Business Barometer is an economic indicator based on surveys of purchasing/supply chain professionals in the Chicago area. A monthly publication of MNI Indicators and the Institute for Supply Management, the index is based on responses of manufacturing and non-manufacturing firms who primarily are members of ISM. An index reading above 50 indicates expansion while a number below 50 indicates contraction.
Below is a graph showing the history of the Chicago Business Barometer. You will need to view the graph on our website to use it’s interactive features, you can do so by clicking here. If you need assistance with either logging in or navigating the website, please contact our office at 800-432-3475 or info@SteelMarketUpdate.com.
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
SMU Community Chat: Tariff-induced panic purchases, inflation, and calculating costs
Chief executive of the Institute for Supply Management (ISM), Tom Derry highlighted how reactive buying behavior has shifted the market into a quiet demand period. Derry presented ISM data during the weekly SMU community chat.
Architecture billings still sluggish despite project inquiry uptick
The Architecture Billings Index (ABI), a leading indicator for non-residential construction activity, declined for an eighth straight month in June.
Beige Book: Tariff pressures mount, flat outlook
All districts reported “experiencing modest to pronounced input cost pressures related to tariffs, especially for raw materials used in manufacturing and construction.”
Steel exports recovered in May but still historically low
US steel exports rose 10% from April to May but remained low compared to recent years. This came just one month after exports fell to the lowest level recorded in nearly five years.
AISI: Raw steel production ticks up near recent high
The volume of raw steel produced by US mills inched higher last week, according to the American Iron and Steel Institute (AISI). After steadily increasing in April and May, domestic mill output stabilized in early June and has remained historically strong since.