Economy
Chicago Business Barometer remains gloomy in September
Written by Brett Linton
September 30, 2024
The Chicago Business Barometer increased marginally in September but continues to indicate deteriorating business conditions, according to Market News International (MNI) and the Institute for Supply Management (ISM).
The Barometer reading rose half a point from August to 46.6 in September, the second-highest reading of the year behind June. A barometer reading above 50 indicates improving business conditions, while a reading below that indicates contraction.
August marks the tenth consecutive month the Barometer has been in contraction territory.
The index averaged 43.3 across the first nine months of this year. One year prior, it was also in contraction territory at 44.1. The index has only indicated expansion once in the past two years (November 2023).
The MNI report attributes September’s slight uptick to improvements in two subcomponents: order backlogs and employment. The supplier deliveries, new orders, and production subcomponents all declined from August.
Respondents were asked two special questions in this month’s survey, which ran from Sept. 1 through Sept. 17.
Q: Have changes in financial conditions impacted your suppliers/clients?
A: Almost half (47%) indicated that the impact was unknown. There was a three-way tie between the next most frequent responses: 16% noted that borrowing was winding down due to higher costs, 16% reported experiencing difficulties with tighter credit conditions, and 16% said they saw no impact. Only 6% said that they were not looking to utilize credit at this time.
Q: Will changes in the federal discount rate (interest rates) have an influence on buying or sourcing strategies?
A: Over 40% responded that their strategies would not be influenced, while approximately one-third said their strategies would change. The remaining 28% reported that this was an unknown.
You can view the full release here.
Brett Linton
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