Economy
Chicago Business Barometer falls for a third month
Written by Laura Miller
January 2, 2025
Economic conditions continued to deteriorate in December, with the Chicago Business Barometer slipping for a third month.
The December Barometer reading of 36.9 declined 3.3 points from the previous month to the lowest level since May 2024.
“The decline was primarily driven by a fall in New Orders, with Production also lower. Increases in Employment, Supplier Deliveries, and Order Backlogs, restricted the downward move,” the Barometer report stated.
The Chicago Business Barometer is considered a leading indicator, providing a regional view of the greater US economy. It is produced by the Institute for Supply Management (ISM) and MNI Indicators.
The report indicated a notable decline in New Orders, which fell 13.5 points from November to the second-lowest level since May 2020.
The Production sub-index also cooled, slipping 2.9 points month over month (m/m). The December reading was the lowest since January 2009 (excluding April and May 2020 during the pandemic).
Special questions
Respondents were asked two special questions in this month’s survey, which ran from Dec. 1 to Dec. 11.
Q: With potential tariff increases in the coming months, is your business taking any of the following precautions/considerations?
A: More than half of respondents reported they were increasing inventories and just over 40% said they were looking into on-shoring. Just over two-thirds are considering new suppliers, and the same amount are raising prices.
Q: Have you put any contingency plans in place in the event of further port worker strikes?
A: Just under half of respondents said they were increasing inventories of raw materials and about a third were increasing inventories of finished goods. Only 10% said they were raising production.
Laura Miller
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