EmailThe Chicago Purchasing Managers Index from Kingsbury International, Ltd., increased from 56.5 in August to 60.4 in September. The Briefing.com consensus expected the Chicago PMI to fall to 54.0.
With the exception of the Kansas City Fed's Survey of Tenth District Manufacturers and the Chicago PMI, every other regional manufacturing survey contracted in September. This suggests that the growth in Chicago is most likely the result of higher demand from Midwest-specific industries, such as motor vehicle manufacturers, and not a harbinger of a national rebound in the manufacturing sector.
The production index increased from 57.8 in August to 63.9 in September. The increase in production may be unsustainable since it was due solely to the largest month-to-month gain in new orders since October 2009. The new orders index increased from 56.9 in August to 65.3, which is the highest level since April.
At the same time, order backlogs fell to a 23-month low. The contraction in backlogs accelerated from 49.6 in August to 45.4 in September. Without a steady supply of backlogs, production will fall precipitously if new order demand slips.
The employment index increased from 52.1 in August to 60.6 in September.
