Economy

Chicago Business Barometer Posts Third Month of Contraction

December 3, 2019

The Chicago Business Barometer rose 3.1 points to 46.3 in November, but remained in contraction for the third consecutive month. All but one component of the general index remained below the neutral 50.0 mark.

New orders rose 12.5 points to 49.9, indicating an improvement in demand. Production slipped to 42.3.

Order backlogs rebounded from October’s sharp decline to 33.1, posting a 45.0 in November. Firms continued to deplete stocks resulting in an 8.7 percent decline to a reading of 43.0 for the month.

Employment demand continued to weaken, dropping the employment index to 49.6. The three-month average for the index was 48.3

Supplier deliveries declined sharply to an index reading of 50.2 for its lowest level since June 2016. Factory gate prices were at their lowest level since April at 53.5.

Tariff costs were a concern for many in the survey. In a special question by MNI Indicators, 57 percent of businesses said they are absorbing tariff costs versus 43 percent who said they are passing costs on to customers.