Chicago Business Barometer Declines Sharply in February

• Business activity index reverses most of January's increase.

• Declines in new orders & production lead the decline. 

• Employment and prices improve.

The ISM-Chicago Purchasing Managers Business Barometer fell 4.3 points in February to 59.5 after rising 5.1 points in January to 63.8. These figures remained above last May's low of 32.9. The Action Economics Forecast expected a reading of 61.1. 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 declined to 57.6 in February from 61.2 in January but remained well above its low of 40.7 reached this past June.

Declines in the component readings were widespread. The new orders figure fell to 55.2 from 66.2 and stood at the lowest level in six months. The production measure declined to 62.0 and reversed virtually all of its January rise. The inventories series dropped to 50.4 from 55.1, though it remained up versus earlier readings of inventory decumulation extending back to Q3 2019.

To the upside, the employment index rose to 49.1, its highest level since October 2019. Order backlogs were more prevalent as the index surged 2.9 points to 63.0, up from 27.6 nine months earlier. Supplier delivery speeds slowed as the index rose to 71.5, a nine-month high.

The prices paid index rose minimally to 75.3 in February from 75.2 in January. It was the highest level since September 2018, up from the April 2020 low of 50.3.

The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey is collected online each month from manufacturing and non-manufacturing 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.