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Economy in Brief

U.S. Chicago Business Barometer Continues to Strengthen in April
by Tom Moeller  April 30, 2021

• 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
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