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Economy in Brief

U.S. Chicago Business Barometer Drops Sharply in February
by Tom Moeller  February 28, 2022

• Component weakness pronounced in production & new orders.

• Employment weakens significantly.

• Pricing power softens.

The ISM-Chicago Purchasing Managers Business Barometer declined to 56.3 during February from 65.2 in January. It was the lowest point since August 2020 and down from the May 2021 peak of 73.3. The Action Economics Forecast expected 63.5. An index above 50 suggests expanding 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 56.9, its lowest point since November 2020.

Leading the index lower last month was the production as it fell to 55.4, its lowest since August 2020. The new orders reading also fell sharply to 53.0 as a little changed 36% of respondents (NSA) reported higher orders but a greatly increased 25% reported a decline. The employment index fell to 43.5 in February, down from the recent high of 56.4 in October. A lessened eleven percent (NSA) of respondents reported higher employment while a greatly increased 24% reported less. The supplier deliveries series weakened to 75.3 from 87.6 and was at the lowest level in twelve months. Fifty percent of respondents reported slower product delivery speeds while three reported quicker speeds. The orders backlog index was little changed at 61.8.

Working higher in February was the inventory index to 57.3, but it remained below the December high of 60.6.

The prices paid index fell to 86.5 in February, down from an October high of 94.1 and the lowest level since March of last year.

Figures for 2021 were revised. 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) Feb Jan Dec Feb'21 2021 2020 2019
General Business Barometer 56.3 65.2 64.3 59.8 66.7 49.0 51.4
ISM-Adjusted General Business Barometer 56.9 63.5 63.4 58.1 62.5 49.6 51.5
   Production 55.4 60.6 62.9 63.0 65.0 48.0 51.3
   New Orders 53.0 65.3 67.3 56.9 66.5 47.2 52.0
   Order Backlogs 61.8 61.9 58.7 62.4 66.8 42.7 47.0
   Inventories 57.3 54.8 60.6 48.7 49.8 44.7 48.7
   Employment 43.5 49.1 44.5 49.2 49.8 41.8 49.6
   Supplier Deliveries 75.3 87.6 81.8 72.6 81.2 66.4 55.6
   Prices Paid 86.5 89.0 90.9 77.1 88.0 59.5 58.6
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