The latest Chicago Purchasing Manager’s Index (Chicago Business Barometer) fell to 41.4 in March from 44.0 in February. This is the fourth straight monthly decline and the lowest level for the index in ten months. The latest reading is worse than the 45.9 forecast and keeps the index in contraction territory for a fourth consecutive month.

Background on Chicago PMI

The Chicago PMI assess the business conditions and the economic health of the manufacturing sector in the Chicago region. A value above 50.0 indicate expanding manufacturing activity, while a value below 50.0 indicate contracting manufacturing activity.

Let’s take a look at the Chicago PMI since it began. The current level of 41.4 is below the level the index was at for the start of 6 of the 7 recessions that have occurred since its inception.

Here’s a closer look at the indicator since 2000.

Chicago PMI vs. ISM Manufacturing Index

Let’s compare the Chicago PMI with the more popular national ISM manufacturing index. Out of the 650 monthly data points, the Chicago PMI has been higher 71% of the time. Despite that overwhelming majority, that the Chicago PMI’s historical average of 54.6 is only slightly higher than the ISM’s of 52.6. It is clear that both indices follow one another. Note the ISM Manufacturing indicator is through the previous month.

Read more updates by Jen Nash