Research >> Economics
Chicago Purchasing Managers Index up by 0.3 points to 57.7 in March
|
The MNI Chicago Business Barometer was broadly stable at 57.7 in March, following a hefty rise of 7.1 points in February to 57.4.
Following a strong February, firms remained upbeat this month, with the increase led by four of the five components of the Barometer, as only Employment receded. March’s positive outturn left the Q1 calendar quarter average at 55.1, the highest level since Q4 2014.
Demand continued to grow, rising for the second month in a row. New orders rose by 1.2 points, to touch a four month high. To keep pace with rising demand, Production also increased, up 1.4 points to a 14-month high of 61.7 in March. Order Backlogs rose for the third consecutive month, but remained just below the breakeven level, where it has sat for the previous three months. Suppliers took longer to deliver key inputs, with the respective indicator 1.6 points higher at 54.4 in March. Employment slipped back into contraction after rising above 50 briefly last month.
To keep up with demand, companies increased their stock levels at the fastest pace since March 2015, with the Inventories indicator rising by 2.1 points to 60.5 in March. The Inventories indicator expanded for the first time following four quarters of contraction, averaging 54.0 in Q1.
This month’s special question asked firms about their expectations for new orders in Q2 compared with Q1. Almost half of respondents were more confident about higher new orders while 41% of them expected orders to be around current levels. Roughly 10% of respondents expected softer ordering patterns in the next three months. When the same question was posed in March last year, respondents were also optimistic about Q2 but less so than this year. Last year, 44% expected higher orders in Q2 and 14% expected orders to ease.
After three consecutive monthly gains, inflationary pressures at the factory-gate eased, albeit remaining at an elevated level. Successive rises in Prices Paid have placed the Q1 average at the highest since Q3 2011 and 12.1% above the last quarter’s level.
“The March Chicago report echoed last month’s upbeat tone of general business conditions. Though the Barometer was little changed, the underlying trend for many key indicators shows improvement, with a shift away from firms reporting worsening to that of remaining at the same level as last month,” said Shaily Mittal, senior economist at MNI Indicators.
Posted: March 31, 2017 Friday 09:45 AM