Chicago Business Barometer at Highest Level in 2.5 Years

The Chicago Purchasing Managers’ Index (PMI), or the Chicago Business Barometer, rose by 5.1 points to 63.8 in January, according to data by ISM-Chicago and MNI on Friday.

This is the highest reading for the index since July 2018.

Surveyed business had various responses to the question, “How is the recent increase in Covid-19 infection rates affecting your business?”

The majority, 50%, reported a mild negative impact, while 31.8% had no impact on their activity.

Meanwhile, 2.3% of respondents saw a strong positive impact on their business and 15.9% noted a strong negative effect.

Among the main five indicators, Production saw the largest monthly gain, followed by New Orders. Employment recorded the biggest decline.

Production surged 9.9 points in January, to the highest level since January 2018.

Firms noted an uptick in output compared to December, a month often slower due to the holidays.

Demand picked up as well with New Orders surging by 7.9 points to the highest level since November 2018.

Order Backlogs grew for the third consecutive month, gaining 6.9 points to a 23-month high. The indicator has been in expansionary territory since September 2020.

Inventories continued to rise 6.2 points to the highest level since October 2018, showing the first reading above the 50-mark since May.

Employment slipped 4.5 points in January, recording the 19th straight reading below the 50-mark.

Supplier Deliveries eased slightly, down 0.5 points in January but remain elevated.

Anecdotal evidence suggested logistical issues and freight backups leading to delays.

Prices paid at the factory gate increased for the fifth consecutive month, rising 1.7 points in January, to the highest level since September 2018.