U.S. Chicago Business Barometer Rebounded in May
Summary
- The production index rose 10 points and the orders index increased 8.6 points.
- Employment still points to contraction in the number of employees.
- Price pressures intensified in May.
The ISM-Chicago Purchasing Managers Business Barometer was at 60.3 in May, up from 56.4 in April but below the peak of 73.3 reached in May 2021. The Action Economics Forecast Survey expected 57.0 for May. 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 rose to 61.0 in May, up from 57.3 in April but below the 64.5 reading of May 2021.
The production index rebounded 10 points to 60.9 in May from 50.9 in April, signaling faster output growth despite supply-chain disruptions. The new orders index rose to 59.7 from 51.1 in April. An increased 39% of respondents (NSA) reported higher orders and 18% reported a drop. The employment index inched up to 46.1 in May from 45.5 in April, remaining below the 50 expansion-contraction dividing line for six consecutive months, suggesting continued challenges to recruit workers. The index had reached its recent high of 56.4 in October 2021. Fifteen percent (NSA) of respondents reported higher employment, while 22% reported less hiring. The supplier deliveries index declined to 69.3 from 74.5 in April, the lowest reading since November 2020. Forty-six percent of respondents (NSA) reported slower product delivery speeds, while only 2% reported faster delivery speeds. The orders backlog index rose to a seven-month high to 64.6 in May from to 63.4 in April. The inventories index rose to 69.1 from 64.6 in April.
The prices paid index rose to 88.6 in May from 86.1 in April. The high was reached in October with a price paid index of 94.1.
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. The expectation figure is from the Action Economics Forecast Survey, which is in AS1REPNA.
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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