Last Update: 31-Mar-15 10:16 ET
- The Chicago PMI increased to 46.3 in March from 45.8 in February. The Briefing.com Consensus expected the index to increase to 52.0.
- In January, the Chicago PMI stood at 59.4. The sudden drop into a significant contraction in February was immediately blamed on extreme weather conditions. As weather conditions returned to normal in March, manufacturing activities were expected to return to their previous expansionary cycle.
- That did not happen.
- Conditions did modestly improved, but the overall index remained firmly in a contraction for a second consecutive month. The pullback that began in February was likely not the result of temporary weather problems.
- Furthermore, the underlying details in March suggest that weakness that started in February may be the beginning of a longer and weaker trend.
- The overall production index increased to 49.3 in March from 44.8 in February, but remains underneath the expansion/contraction threshold. The contraction in both new (42.3 from 42.0) and unfilled (41.9 from 41.1) orders were virtually unchanged. There are not enough unfilled orders on the books to push production back into an expansion without a sizable increase in new orders growth.
- One positive note, employment returned to an expansion, albeit a weak one, as the related index increased to 50.3 from 49.8 in February.
- The Chicago PMI has little overall economic value, and is only watched by the financial markets because it is usually released one day in advance of the similar national ISM manufacturing survey. A significant move in this regional survey will therefore sometimes be seen as having predictive value for the ISM index.