Economy
Chicago Business Barometer falls to 16-month low
Written by Brett Linton
April 30, 2024
The Chicago Business Barometer slipped further in April, now at the lowest measure recorded since November 2022 according to Market News International (MNI) and the Institute for Supply Management (ISM).
The Barometer reading eased 3.5 points to 37.9 in April from March, marking the fifth consecutive month it has been in contractionary territory. This is the fifth-lowest reading seen over the last decade, only greater than the previously mentioned month as well as April, May, and June 2020.
The MNI report accredits this reduction to substantial declines in new orders, production, and employment. A decline in supplier deliveries was also noted, while an increase in order backlogs slightly offset the decline.
Employment saw a significant decrease from March to April, now at the second-lowest reading recorded since the pandemic. Both production and new orders fell to 16-month lows, with numerous survey respondents reporting fewer new orders. Supplier deliveries also eased to multi-month lows.
Order backlogs and prices paid both saw rebounds in April, with prices paid moving up to an eight-month high. Inventories recovered to a five-month high, with the report citing delays in planned restocking.
Respondents were asked two special questions this month:
- The first asked how has their ability to pass on input costs changed over the past three months. Only 3% reported a greater ability to pass along costs. Almost half responded ‘somewhat greater’ while a third reported no change. The remainder reported they were less able to pass along costs.
- The second asked what potential disruptions respondents were most concerned about. The majority said geopolitical conflicts, followed by supply shortages, cyber attacks, government regulations, and public health crises.
Brett Linton
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