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Economy in Brief

U.S. Chicago Business Barometer Falls Further in September
by Tom Moeller  September 30, 2021

• Production & new orders weaken while supply constraints ease.

• Employment increases for first time since April.

• Prices paid weaken modestly.

The ISM-Chicago Purchasing Managers Business Barometer dropped to 64.7 in September, the lowest level since February, after falling to 66.8 in August. The Action Economics Forecast Survey had expected a decline to 65.3. An index above 50 suggests growing business activity in the Chicago area. Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure fell to 61.3 in September, its lowest point in three months.

Production eased slightly in September to 60.7 from 61.0 in August. The figure was down sharply from a high of 72.9 in April. A smaller 38% (NSA) of respondents reported a higher level of output and a steady 18% reported a decline. New orders fell to 64.4 in September, a six-month low. Order backlogs posted the largest m/m decline to 61.1 from 81.6. Supplier delivery speeds sped up as indicated by a decline in the index to 81.2, the lowest level since April. A higher 64% (NSA) of respondents reported slower delivery speeds while none reported quicker speeds, down from 10% in April. Inventories slipped to 48.0 in September, indicating a slower pace of inventory liquidation. They remained up from 37.5 in June.

The employment index rose modestly to 52.4 in September after four straight months below the break-even level of 50. An increased 24% (NSA) reported more hiring while a steady 22% reported less.

The prices paid index fell to 90.7 from 93.9 but remained near the series high of the last six months. Eighty-one percent (NSA) of respondents raised prices while none lowered them.

The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey is collected online each month from manufacturing and nonmanufacturing firms in the Chicago area. Summary data are contained in Haver's USECON database with detail including the ISM-style index in the SURVEYS database.

Chicago Purchasing Managers Index (%, SA) Sep Aug Jul Sep '20 2020 2019 2018
General Business Barometer 64.7 66.8 73.4 61.5 49.0 51.4 62.4
ISM-Adjusted General Business Barometer 61.3 63.7 63.5 57.8 49.6 51.5 60.8
   Production 60.7 61.0 68.8 66.4 47.9 51.3 64.6
   New Orders 64.4 67.8 72.2 63.3 47.1 52.0 63.8
   Order Backlogs 61.1 81.6 70.0 51.8 42.6 46.9 58.0
   Inventories 48.0 48.8 42.6 46.9 44.7 48.7 55.4
   Employment 52.4 48.3 47.5 44.7 41.8 49.6 55.2
   Supplier Deliveries 81.2 92.8 86.5 67.9 66.4 55.6 64.8
   Prices Paid 90.7 93.9 91.6 63.8 59.5 58.5 74.0
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