The Chicago Business Barometer hit a six-and-a-half year high in October, rising to 66.2 from 65.2 in September.
Demand and output jumped during the month. New orders rose to their highest level since June, and production increased to its highest reading since August 2014.
Longer backlogs were attributed to the hurricanes and healthy demand. Backlogs were at their highest level in 43 years after setting a 29-year record in September.
The longer supplier delivery times and stockpiling of goods that occurred following the storms softened somewhat in October. Lead times for metals were reported as lengthened.
Employment dipped into contraction territory with firms having difficulty finding skilled and trained workers. Temporary hires increased in response. Some geographical shift of skilled workers was seen as employees pursued higher wages elsewhere.
Factory gate prices lost nearly half of September’s gains as input prices and shortages abated after an increase from the storms. Plastic and metals prices were reported as remaining high.
Only 12 percent of firms expect business operations to contract in the fourth quarter with 44 percent expecting no change and 44 percent expecting growth.
The Chicago Business Barometer, published monthly by MNI Indicators, 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 U.S. 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.
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