Manufacturing activity in the Chicago area remained strong in September, posting its highest reading since July 2005, the National Association of Purchasing Management-Chicago said Friday.
In fact, the report should be well-received by the manufacturing community, as it showed prices paid fell for the third-straight month while production, new orders and order backlogs all increased.
The Chicago Business Barometer came in at 62.1 this month, well above the 57.1 posted in August.
Kingsbury International, which releases the data, said that while the report does not offer an explicit reading on inflation, and does not show anything better than a slowing in the breadth of price increases, the reports of stable or rising production were matched by an even larger increase in the new orders index, and order backlogs rose, too.
The reading did show a notable rise in inventories.
“Either businesses are expecting good times ahead, and building inventories to meet these expectations, or the economy is not as robust as it appears otherwise,” Kingsbury said.
Generally speaking, the report shows a continuation of its recent trend of a mixed economy with continued growth.
“The near-term trend (three-month moving average) documents somewhat more participation in the growth,” Kingsbury said. “While survey respondents report falling evidence of flat or increased prices paid, the levels remain relatively high. Thus, concern for ‘stagflation’ is lessened, but not dispelled and the outlook for the next year remains guarded.”
Separately, the University of Michigan released its survey of consumer sentiment, which rose to 85.4 in September from 82.0 last month.