The Institute for Supply Management Chicago has released a very positive report on business activity for November 2010, almost too positive versus the numbers. Their business activity index increased to 62.5, up from 60.6 in October. Below is their crappy graph, with the start date in 2000. The vertical line indicates 2010 and the middle line is 50. Above 50 is expansion and good, below 50 is contraction and bad. From just the trend line, does that look like a blow out to you?

• New Orders are at 2007 levels, with November's index at 67.2 versus 65.0 for October 2010
• Production reached its highest level since February 2005, up to 71.3 with October's index valued at 69.8

Prices paid are at April's highs and employment is lukewarm at 56.3. Employment was higher in June than it was in November.

This report is being called a blow out, but unfortunately without the raw data going back a couple of years, plus the blow out headlines, while positive, I don't think the report indicates all is well in the Midwest.

Tale a look at some of the comments from the report. Below are statements about how foreigners are buying businesses and how to keep your Indian offshore outsourcing costs low!

9. Trends are still for moving out of or away from major population centers & there is more foreign ownership/manufacturing both abroad & domestically by foreign companies; a lot of state issued bonds (such as those in Illinois) are being sold to foreign owners.
10. Indian offshore rates are being pounded down by competition - do not just renew existing contracts. Switching generic software when faced with maintenance increases, or turning off maintenance as we prepare to switch suppliers of generic software. Switch to generic win/tell servers for everything - no custom equipment. Offering pre-emptive renewals with one extra year on term if we get 15% reduction and caps on price increases.

Just what we need on U.S. unemployment eh? Indian offshore outsourcers to become cheaper?

Others are worried about the dollar making their overseas purchases more expensive and one said:

The ball is on a slow roll forward it would seem; everywhere but for us.

The report has terrible graphs, and seemingly the raw data to make for a better analysis is not available. With that, their pdf of the Chicago ISM report is attached to this post.