Chicago Business Barometer™ –  Weakened to 43.6 in February

Key Points – February 2023 Report

The Chicago Business Barometer™, produced with MNI, declined by a further 0.7 points in February to 43.6, the lowest since November ’22. The headline index signalled a sixth consecutive month of contractionary business activity.

• Production, Employment and Prices Paid indicators declined over the month in February, with Production recording the steepest deterioration. New Orders, Order Backlogs, and Supplier Deliveries increased, whilst the Inventories subcomponent was little changed. All indicators barring Supplier Deliveries and Prices Paid were in contractive territory (sub-50).
• Employment weakened for a third month, slipping a further - 4.7 points into contractive territory. This was the weakest since June ’20 and outside of the April-June 2020 period the weakest since 2009. Recruiting was challenging as firms struggled to find personnel. Over one-third of firms recorded lower February employment.
• Prices Paid sank -7.2 points, returning to late 2022 levels after having briefly surged in January. Around 39% of firms paid higher prices in February, slowing from 54% in January.
• Production fell by 10.2 points in February, more than reversing last month’s rebound. Approximately 40% of businesses flagged slowing activity.
• New Orders increased by 3.0 points. Despite being the highest since August ’22, the index remains contractive, signalling a ninth successive month of declining orders. Firms noted improved supply of key components boosting orders. Order Backlogs grew by 4.5 points to 40.0 after diving 19.2 points in January as easing supply chain pressures allowed for significant backlog catch-up.
• Supplier Deliveries gained 3.6 points in February. Logistics issues persisted and deliveries took largely the same time as the month prior.
• The inventories subcomponent was little changed, after having declined into year-end. Supplier issues were again cited as grounds for higher stock levels.

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MNI_Chicago_Press_Release_2023-01.pdf

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