Contraction Deepens in Chicago Business Activity in May – MNI Indicator
By Dean Seal
MNI Indicator Manufacturers activity in the Chicago area contracted for a ninth consecutive month in May as demand cooled and hiring remained challenging, data from a survey compiled by MNI Indicators showed Wednesday.
The Chicago business barometer fell from 48.6 in April to 40.4 in May, its lowest reading in six months and below the 47.0 consensus forecast from economists polled by The Wall Street Journal.
The index suggests that activity shrank in May, as it fell below the 50 mark that separates expansion from contraction.
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 backlog, production, supplier deliveries and employment.
While the production index declined in May, a rebound last month, clients of some firms saw a slowdown in business activity, the report said.
The new orders index also fell to a six-month low and its second lowest level since June 2020, at least partly due to more orders being placed by customers of some firms.
The employment index also softened, indicating that companies are struggling to hire and retain employees.
The price paid index fell to its softest level since August 2020, indicating that demand has weakened. The impact of decline in commodity prices from suppliers remained slow and modest, the report said.