The MNI Chicago Business Barometer reached a six-and-a-half year high in December. The Barometer rose to 67.6 from 63.9 in November. The indicator also had its best quarterly performance since Q1 2011, rising to 65.9 in the fourth quarter from 61.0 in the third.
Production hit a 34-year high in December, while new orders were at a three-and-a-half year high. Order backlogs increased, but employment and supplier deliveries fell last month. Employment levels, however, remained in expansion territory, said MNI Indicators. On a 12-month average, 2017 was the best year for employment since 2014.
Firms reported an increase in unfilled orders during the month, but supplier delivery times were shorter.
Inventories were at a three-year high in December as firms prepared for production launches in the New Year.
Factory gate prices remained high in December, although at the lowest level since August. Higher global demand and hurricane-induced shortages helped to elevate prices in 2017.
MNI Indicators asked firms to predict conditions for their business and the economy in 2018. Fifty percent of companies expect growth of 0-5 percent, while 37 percent expect to grow by 5-10 percent and 12 percent expect growth of 10 percent or higher.
Regarding the economy as a whole in 2018, 61 percent of firms predicted the U.S. economy would grow 2-5 percent this year, while 29 percent expect a more modest 0-2 percent. Only 6 percent expect the economy to contract in 2018.
“Sentiment among businesses started 2017 in good shape and only impressed more as the year progressed. December’s result secured the MNI Chicago Business Barometer’s first full year of expansion since 2014. With New Orders ending the quarter in fine shape, there is every chance this form could be carried over into 2018,” said Jamie Satchi, economist at MNI Indicators.
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