Manufacturers/End Users
August 31, 2026
Chicago Business Barometer tumbles into contraction in August
Written by Laura Miller
Business cooled off in Chicago in August, falling into contraction territory for the first time since April, according to the latest Chicago Business Barometer reading.
The Barometer fell 10.5 points from July to 47.1 in August. It fell below the 50-point neutral mark for the first time since April and was the lowest reading since December.
The Institute for Supply Management and MNI produce the monthly Chicago Business Barometer report. They collect responses from manufacturing and non-manufacturing firms in the Chicago area. The survey is a regional indicator of business activity and is monitored for signals on the wider US economy. The latest survey ran from Aug. 1-12.
According to the report, New Orders, Order Backlogs, Production and Supplier Deliveries drove the month-over-month decline. A small bump in Employment offset some of the fall.
Firms reported a sharp contraction in New Orders, slipping 15.4 points while remaining above April’s low point.
Order Backlogs contracted by 12.1 points. Although the reading was above the neutral mark, it was at its lowest level since November.
With some respondents noting a slowdown in customer demand, Production fell by 8.8 points to its first contractionary reading since December, the report said.
Inventories softened by 14 points, returning to contraction after one month in expansion.
Prices Paid rose by 3.8 points to the highest mark since February 2022, with several respondents noting higher metal costs.
In a special August question, respondents identified the principal upside and downside risks to their businesses over the following six months, excluding supply-chain challenges. Key upside risks mentioned were technology and AI, growth in new markets, and opportunities for procurement cost savings. On the downside, respondents named material shortages and supply disruptions, ongoing geopolitical and tariff uncertainty, and high interest rates.
