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

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.

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