Economy

Strong Gain for Chicago Business Barometer

May 30, 2014

The Chicago Business Barometer reached its highest level since October, climbing 2.5 point to 65.5. The new reading, when taken with other economic indicators, shows a strong recovery in the second quarter after a lackluster start to the year. This is good news for the flat rolled steel industry in North America.

With winter finally over, backlogs spiked to a three year high as companies catching up on orders saw new demand.

New orders expanded mildly in May. Production decreased but remained robust following strong growth in April. Lead times lengthened slightly and inventories of finished goods rose out of contraction to the highest level since November.

Prices Paid rose after falling for the past three months to its largest monthly gain in five years. Employment levels dropped slightly below the 12 month average.

“It looks pretty clear now that the slowdown in Q1 was due to the poor weather, with activity now back to or exceeding the level seen in Q4,” said Philip Uglow, Chief Economist at MNI Indicators. “The rise in the Barometer to a seven month high in May suggests we’ll see a significant bounceback in GDP growth this quarter following the contraction in Q1.”

“We’ve had false dawns before, but the long run of strength in the survey, coupled with other more positive economic data, suggests growth is becoming more entrenched.”

Below is one of our interactive graphics which can only be viewed when reading this article on our website. If you need help logging in please contact our office at 800-432-3475 or by email: info@steelmarketupdate.com

{amchart id=”111″ Chicago Business Barometer Index}