Economy
Chicago Business Barometer Falls to May 2016 Level
Written by Sandy Williams
January 31, 2017
The Chicago Business Barometer lost 3.6 points in January, registering 50.3 from a revised 53.9 in December. The Barometer was at its lowest level since May 2016, after a strong fourth quarter averaging 54.3, said MNI Indicators.
New orders fell by 7.8 points dipping into contraction and dragging down the composite index. Production fell 2.3 points to 56.0 and employment levels were below the neutral point for the third straight month. Order backlogs increased, although remaining in contraction territory, and supplier deliveries lengthened to the highest level since May 2016. Inventories decreased at the fastest pace since May, pushing the inventory index down 2.7 points this month.
The prices paid index rose to its highest level since September 2014, registering 61.4.
“Business activity in the New Year got off to a slow start with contracting orders and easing production weighing heavily on hiring intentions. Activity in Q1 is usually weaker due to seasonal factors, so the following surveys will provide a better picture of business performance.”
“Respondents to our survey did not expect to be affected by rate increases by the Fed in 2017. Although cost of capital is expected to increase, firms seemed to have already factored this into their purchase decisions,” said Shaily Mittal, senior economist at MNI Indicators.
About the Chicago Business Barometer
The Chicago Business Barometer, produced by MNI Indicators, is a closely watched leading indicator of U.S. economic activity and is based on a survey panel of purchasing/supply chain professionals, primarily drawn from membership of the Institute for Supply Management-Chicago (ISM-Chicago). The survey panel contains both manufacturing and non-manufacturing firms, many with global operations.
The Barometer is a composite diffusion indicator made up of the Production, New Orders, Order Backlogs, Employment and Supplier Deliveries indicators and is designed to predict future changes in US gross domestic product (GDP). An indicator reading above 50 indicates expansion compared with a month earlier while below 50 indicates contraction. A result of 50 is neutral. The farther an indicator is above or below 50, the greater or smaller the rate of change.
Below is a graph showing the history of the Chicago Business Barometer. You will need to view the graph on our website to use its interactive features, you can do so by clicking here. If you need assistance logging into or navigating the website, please contact our office at 800-432-3475 or info@SteelMarketUpdate.com.
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
Second steel derivatives S232 inclusion window opens, business community voices concern
The US Department of Commerce announced that its second window for submitting applications for the inclusion of derivative steel and aluminum products in Section 232 tariffs is now open, according to the US Federal Register. September’s Inclusion Window Sept. 15 through Sept. 29, applicants can email requests for inclusions to the Defense Industrial Base Programs. The first […]
Steel Summit: ITR economist urges execs to prepare for growth, not recession
If the steel industry professionals who made it to the very final presentation of this year’s SMU Steel Summit were expecting another round of cautious forecasting, they were in for a surprise. Because what they got was a wake-up call.
ISM: Manufacturing growth remained down in August
US manufacturing activity remained muted in August despite a marginal gain from July's recent low, according to supply executives contributing to the Institute for Supply Management (ISM)’s latest report.
Steel Summit: Dr. Basu blames tariffs for riskier path ahead
Steel executives packed the main conference hall of the 2025 SMU Steel Summit on Tuesday, Aug. 26, to hear economist Dr. Anirban Basu lay out his blunt view of tariffs, inflation, and demand.
Steel Summit: Schneider sees SDI ‘on the edge of a very good run’
Steel Dynamics Inc. (SDI) President and Chief Operating Officer, Barry Schneider, remains bullish about the Fort Wayne, Ind.-based steelmaker’s position in the current market.