Economy

Chicago Business Barometer Gains Momentum in December

January 4, 2021

The Chicago Business Barometer edged up 1.3 points in December to 59.5, reports MNI Indicators. The gain came as a welcome surprise as employment levels, although still in contraction, made notable improvement last month. The production index gained 1.1 points while demand slipped 2.0 points.

Order backlogs grew for a second month, gaining 3.6 points. The inventories index jumped to a seven-month high while supplier deliveries stayed relatively unchanged. Firms indicated continued delivery delays due to shipping and trucking issues.

Factory gate prices were at their highest level since September 2018, gaining 2.2. points. Firms noted an increase in metals pricing.

On a quarterly basis, new orders and production were at a two-year high of 61.0 and 61.6, respectively. The fourth-quarter index for employment posted 45.3. Factory gate prices in Q4 rose to 71.8, the highest level since third-quarter 2018.

Firms were asked, “What is your planned business activity forecast for 2021, by percent?” Most (44.9 percent) said growth would be below 5 percent while 42.9 percent expected growth to be from 5 to 10 percent. The majority of firms did not know if they would make any adjustments to their 2021 budget as vaccines roll out over the next several months.