Global| Apr 30 2020U.S. Chicago Business Barometer Weakens Drastically in April
by:Tom Moeller
|in:Economy in Brief
Summary
• Chicago PMI fell to the lowest level since March 2009. • ISM-Adjusted measure similarly weakened due to the coronavirus. • Lower orders and production led this month's decline. The Chicago Purchasing Managers Business Barometer fell [...]
• Chicago PMI fell to the lowest level since March 2009.
• ISM-Adjusted measure similarly weakened due to the coronavirus.
• Lower orders and production led this month's decline.
The Chicago Purchasing Managers Business Barometer fell to 35.4 in April from 47.8 in March, reflecting the depressing effects of the coronavirus on business around the world. A reading below 50 for this diffusion index suggests contracting activity in the Chicago area. The Action Economics Forecast Survey expected a reading of 37.7.
Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with similar methodology to the ISM Composite Index. This measure fell to 42.1 in April, the lowest reading since July 2009. The Chicago ISM-Adjusted index has a 78% correlation with the national ISM Manufacturing Index, which is scheduled for release tomorrow.
Of the five main indicators, production and new orders posted the largest declines. A lessened 15% (NSA) of respondents reported higher orders and a greatly increased 64% reported a decline. These were offset by a surge in the supplier delivery measure. It indicated slower delivery speeds and stress in the supply chain. The inventories measure also surged and reversed the prior month's decline.
The employment index plunged to 33.8, the lowest level since June 2009. Just two percent of survey respondents reported a rise in hiring while an increased 33% reported a decline.
The index of prices paid fell to 48.4 indicating that, on balance, lower prices were realized by most survey respondents for the first time in four years.
The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey covers a sample of over 200 purchasing professionals in the Chicago area with a monthly response rate of about 50%. Summary data are contained in Haver's USECON database, with detail including the ISM-style index in the SURVEYS database. The Action Economics Forecast Survey is available in AS1REPNA.
| Chicago Purchasing Managers Index (%, SA) | Apr | Mar | Feb | Apr '19 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| General Business Barometer | 35.4 | 47.8 | 49.0 | 53.6 | 51.3 | 62.4 | 60.8 |
| ISM-Adjusted General Business Barometer | 42.1 | 46.9 | 50.8 | 52.9 | 51.4 | 60.8 | 59.0 |
| Production | 25.3 | 44.4 | 51.0 | 51.6 | 51.2 | 64.5 | 64.2 |
| New Orders | 24.2 | 45.2 | 49.1 | 55.1 | 52.0 | 63.8 | 63.4 |
| Order Backlogs | 37.3 | 40.3 | 38.2 | 49.8 | 46.9 | 58.0 | 55.2 |
| Inventories | 48.2 | 34.6 | 48.1 | 50.4 | 48.7 | 55.4 | 54.9 |
| Employment | 33.8 | 44.9 | 44.5 | 51.2 | 49.6 | 55.3 | 52.9 |
| Supplier Deliveries | 78.9 | 65.3 | 61.3 | 56.4 | 55.6 | 64.8 | 59.4 |
| Prices Paid | 48.4 | 56.7 | 52.9 | 51.8 | 58.5 | 73.9 | 64.0 |
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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