Chicago Business Barometer rose to 16-month high in March

The Barometer has only signaled expansion once in the last two and a half years (November 2023).

MNI attributes March’s rise to improvements in four of the five subcomponents, with many reaching multi-month highs. Production, employment, order backlogs and new orders all increased from February. The production subcomponent entered expansion territory for the first time in 15 months. The only subcomponent to decline from February was supplier deliveries, fallig two points.

Respondents were asked two special questions in this month’s survey, which ran from March 1 to March 17.

Q: With potential tariff increases in the coming months, is your business taking any of the following precautions or considerations?

A: The largest share of respondents (35%) plan to increase prices. Another 22% are considering new suppliers, while an equal 22% plan to increase inventories. Meanwhile, 18% are looking into on-shoring, and the small remainder (2%) plan to increase employment levels.

Q: How has/will your business handle unexpected input costs to raise output prices?

A: The majority (70%) will address cost increases on a case-by-case basis. Of the remaining 30%, most intend to pass costs on to customers in some form, while 3% responded they would add a temporary surcharge to offset price increases.

View the full release here.