Economy
Chicago Business Barometer Takes Unexpected Plunge
Written by Sandy Williams
December 31, 2015
The Chicago Business Barometer (or Chicago PMI) fell at its fastest rate since 2009, down 5.8 points to 42.9 in December. The drop took analysts by surprise who were projecting a reading in the 48 to 50 range.
MNI Indicators notes that the December reading is 16.5 points below the January 2015 high of 59.4.
Backlogs fell 17.2 points to 29.4, below the neutral point of 50 for the eleventh consecutive month. New orders fell at its fastest pace for year to the lowest level since May 2009. Production entered contraction for the sixth time in 2015. Employment lost its recent gains, falling below neutral to its lowest level since July.
Only supplier deliveries increased in December, with longer lead times likely due to logistic issues rather than demand, said MINI.
When asked to forecast demand in 2016, 55.1 percent of those surveyed expected a better year than 2015 while 30.6 percent expect unchanged conditions.
Chief Economist of MNI Indicators Philip Uglow said, “The steepness of the decline in the Barometer in recent months ends a particularly volatile year, which has seen orders and output move in and out of contraction. It lends weight to the Fed’s gradual approach to tightening, with the flexibility to change direction if needed.”
Bloomberg attributed general sluggish demand in the Chicago area, lower energy prices and a strong US dollar to the unexpected drop in the PMI.
Below is a graph showing the history of the Chicago Business Barometer. You will need to view the graph on our website to use it’s interactive features, you can do so by clicking here. If you need assistance with either logging in or navigating the website, please contact our office at 800-432-3475 or info@SteelMarketUpdate.com.
Sandy Williams
Read more from Sandy WilliamsLatest in Economy
New York state manufacturing falls back into contraction
After a brief pickup in September, manufacturing activity in New York state retreated into contraction, according to the October Empire State Manufacturing Survey.
Dodge Momentum drops on moderating data center growth
Slowing growth in data center planning caused the Dodge Momentum Index (DMI) to pull back in September. The decline followed five months of growth after the index hit a two-year low in March.
US construction spending drops again in August
Construction spending in the US declined for a third month in August but showed an increase year over year (y/y). The US Census Bureau estimated construction spending to be $2.131 trillion in August on a seasonally adjusted annual rate (SAAR). While this was 0.1% below July’s revised spending rate, it was 4.1% higher than spending […]
ISM: Manufacturing contracts again in September
US manufacturing activity contracted for the sixth consecutive month in September, according to the latest report from the Institute for Supply Management (ISM). The index has indicated a contracting industrial sector for 22 of the past 23 months.
Chicago Business Barometer remains gloomy in September
The Chicago Business Barometer increased marginally in September but continues to indicate deteriorating business conditions.