National Association of Purchasing Management Chicago (NAPM Chicago)

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Will Kenton
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Will Kenton is an expert on the economy and investing laws and regulations. He previously held senior editorial roles at Investopedia and Kapitall Wire and holds a MA in Economics from The New School for Social Research and Doctor of Philosophy in English literature from NYU.
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Updated May 25, 2021

What Is the National Association of Purchasing Management Chicago (NAPM Chicago)?

The National Association of Purchasing Management Chicago (NAPM Chicago) is an association that compiles a survey and index that monitors business conditions in Chicago and its surrounding areas.

The National Association of Purchasing Management Chicago surveys firms in both the manufacturing and non-manufacturing sectors and provides a reading of the growth status of business conditions that are either above or below 50%. Readings above 50% indicate expanding business conditions, while a reading below 50% indicates contracting conditions.

Key Takeaways

  • The National Association of Purchasing Management Chicago (NAPM Chicago) is an association that monitors business conditions in Chicago and its surrounding areas.
  • The association surveys firms in both the manufacturing and non-manufacturing sectors.
  • Afterwards, NAPM Chicago releases an index that provides a reading of the growth status of business conditions.
  • Readings on NAPM Chicago's index above 50% indicate expanding business conditions, while readings below 50% indicate contracting conditions.
  • Generally, the index is thought to be a leading indicator of the ISM manufacturing index.

Understanding the National Association of Purchasing Management Chicago (NAPM Chicago)

NAPM Chicago provides readings that give followers an idea of business conditions in the area. Their survey tells readers whether conditions are expanding or contracting. As with most other indicators that give readers a feel for current economic trends, the NAPM Chicago is useful to understand the overall direction of the economy.

Equity markets would enjoy seeing this indicator rise, as business expansion should lead to higher corporate profits, and thus rising stock prices. The bond markets would enjoy seeing more moderate growth to stem inflationary pressures that would hurt bond prices due to the erosion of purchasing power of the principle and coupon payments.

Because it is thought that the NAPM Chicago surveys the manufacturing sector primarily, it is thought to be a leading indicator of the ISM manufacturing index.

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