The Chicago Purchasing Managers’ Index (PMI) provided by Institute for Supply Management is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.
A PMI of more than 50 represents expansion of the manufacturing sector, compared to the previous month. A reading under 50 represents a contraction, while a reading at 50 indicates no change. Although the ISM publishes several indexes, the PMI is the most widely followed and is sometimes referred to as the ISM index.
The Chicago-PMI survey registers manufacturing and non-manufacturing activity in the Chicago region. Investors care about this indicator because the Chicago region somewhat mirrors the nation in its distribution of manufacturing and non-manufacturing activity.
The Chicago PMI edged up to 52.9 in June from 52.7 in May.