MNI 5 Things: Chicago PMI Slips To 12-Mo Low on Production Dip

     LONDON (MNI) - The following are the key points from the March MNI Chicago

Business Barometer:

     - The MNI Chicago Business Barometer followed up declines in both January

and February with a hefty 4.5 drop in March, ending the first quarter of 2018 at

57.4 -- the lowest outturn in exactly a year and the first sub-60 outturn in

seven months. It is the first time the Barometer has fallen in three consecutive

months since October 2013, although with the caveat that this year's slide

commenced after December's near-seven-year-peak.

     - Underlying growth remains robust. Although the Barometer fell back from

the Q4 2017 result in Q1, it was still the second-best calendar quarter result

since Q2 2014 and the best Q1 outturn in seven years.

     - As was the case in both January and February, it was the pace of

production and incoming orders that led the March slide. Firms reported supply

chain disruptions impacting their productive capacity while the pass through of

higher input prices to consumers also weighed on demand. Production fell to the

lowest level since October 2016 while New Orders slipped to a level last seen

lower in January last year.

     - Looking forward, however, the majority of firms were optimistic activity

would perk up again. Roughly half of all firms expect orders to come in stronger

in Q2 compared to Q1, with some firms anticipating a pickup in construction

activity or a boost from new product launches. On the other hand, just under a

tenth saw orders receding further.

     - Input prices remain a pain for firms. March's increase in the Prices Paid

indicator not only recaptured the bulk of the February ease but was enough to

take the quarterly average to a near-seven-year high. Steel and aluminium prices

were among the materials said to have gone up in price on the month.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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