Global| Apr 30 2021U.S. Chicago Business Barometer Continues to Strengthen in April
by:Tom Moeller
|in:Economy in Brief
Summary
• Barometer jumped to highest level since December 1983. • New orders & orders backlogs surge. • Pricing power improves significantly. The ISM-Chicago Purchasing Managers Business Barometer strengthened to 72.1 in April from 66.3 in [...]
• Barometer jumped to highest level since December 1983.
• New orders & orders backlogs surge.
• Pricing power improves significantly.
The ISM-Chicago Purchasing Managers Business Barometer strengthened to 72.1 in April from 66.3 in March. It was the highest level since December 1983. The Action Economics Forecast expected a reading of 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 held steady at 64.9, remaining well above the low of 40.7 reached in June 2020.
The new orders index jumped roughly 10 points to 72.2, almost a 7-year high. The order backlog series strengthened to 73.2 from 57.0. It was the highest level since December 1973. Production improved to 72.9, up from 72.0 last month and the highest level since January 2018. Employment improved to 56.4, the highest since the middle of 2018. To the downside, inventories fell to 46.8 from March's nearly three-year high of 55.6. The supply delivery index eased to 76.4, indicating slightly quicker product delivery speeds, but the index remained well above lows in 2019.
Prices paid jumped to 91.5, the highest level since February 1980. Eighty-one percent (NSA) of respondents reported paying higher prices while none paid less.
This month's special survey question to respondents was "Do you plan to expand your workforce over the next three months?" The majority, at 54.8%, plans to expand their work force, either with permanent (16.7%) or temporary (14.3%) workers, or both (23.8%). Against that, 45.2% have no plans to expand their staff levels.
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.
| Chicago Purchasing Managers Index (%, SA) | Apr | Mar | Feb | Apr '20 | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|
| General Business Barometer | 72.1 | 66.3 | 59.5 | 35.3 | 49.0 | 51.4 | 62.4 |
| ISM-Adjusted General Business Barometer | 64.9 | 64.9 | 57.6 | 41.7 | 49.6 | 51.5 | 60.8 |
| Production | 72.9 | 72.0 | 62.0 | 25.3 | 47.9 | 51.3 | 64.6 |
| New Orders | 72.2 | 62.3 | 55.2 | 24.1 | 47.1 | 52.0 | 63.8 |
| Order Backlogs | 73.2 | 57.0 | 63.0 | 37.5 | 42.6 | 46.9 | 58.0 |
| Inventories | 46.8 | 55.6 | 50.4 | 47.7 | 44.7 | 48.7 | 55.4 |
| Employment | 56.4 | 54.6 | 49.1 | 33.9 | 41.8 | 49.6 | 55.2 |
| Supplier Deliveries | 76.4 | 79.9 | 71.5 | 77.5 | 66.4 | 55.6 | 64.8 |
| Prices Paid | 91.5 | 80.4 | 75.3 | 50.3 | 59.5 | 58.5 | 74.0 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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