Chicago Business Activity Contracted in September For First Time in Two Years — MNI Indicators
By Xavier Fontdegloria
Economic activity in Chicago contracted in September for the first time since June 2020, when the first Covid-19 pandemic hit the region, according to data from a survey compiled by MNI Indicators published Friday.
The Chicago Business Barometer fell to 45.7 in September from 52.2 in August. The indicator signals activity contracted as it came in below the 50 threshold which indicates growth.
Economists polled by The Wall Street Journal expected the index to come in at 51.8.
The barometer is compiled after surveying firms in the Chicago area to assess business conditions. The index takes into account five components: new orders, order backlogs, production, supplier deliveries and employment.
All main indicators fell in September and reached their lowest levels since summer 2020, MNI Indicators said.
The production index fell to 44.5 in September, suggesting output declined, as continued supply-chain issues and slowing new orders hit production.
The new orders index declined to 42.2 due to softening demand. The index has suggested a drop in orders for four consecutive months. Order backlogs fell to 41.9, the report said.
The employment index also declined to contraction territory, dropping to 40.2 and signaling that firms cut jobs over the month.
The supplier deliveries index decreased to 59.8, the lowest level since July 2020, as deliveries remained unstable and vendor lead times long, MNI Indicators said.
The prices paid index also declined to 74.1, signaling still elevated but easing inflation pressures. “Price paid was the lowest since November 2020 and signals a more substantial slowing of prices charged related to an early sign of contracting demand in specific products,” the report said.
Write to Xavier Fontdegloria at [email protected]