The Chicago Purchasing Managers’ Index, or PMI, slid unexpectedly to 52.4 percent for the month of March, a drop of 4.4 percentage points over the month of February.
Growing declines in new orders, production, and another dip in order backlogs caused the index to fall, after a strong start during the beginning of the year. Economists polled by MarketWatch expected a 56.4 percent reading for the month.
Regardless, a reading over 50.0 percent indicates growth, signaling that although the economy has continued to strengthen, its pace has slowed since the new year. Panelists who are asked to comment on the results offered comments, which varied in degrees of optimism. “Our business is steady, lots of noise of large orders coming, but still waiting to see them,” one said.
Others shared the sentiment that the dip is temporary, and not indicative of prolonged slowing of growth. “Sales and order backlog declined in February, and March order book started very soft. We believe it’s an exception and seasonality in our business, hope it’s not a trend,” added another.
One panelist, speaking about his company, said, “An observation, a company we buy steel from, they also pre-cut steel for new home construction, back in 2007 they shipped 110 rig packages per week, today they ship 2 rig packages per week, and for carpenters, for one employed there are 15 unemployed.”
Overall, the panelists shared a consensus that although orders were down, the money was flowing, albeit slowly.