MNI Chicago Business Barometer Accelerates To 64.7 in February

--MNI Chicago: New Orders Resurge To 3M High After Jan's 2Y Low

--MNI Chicago: Inventories Dip Below 50 Level

--MNI Chicago: Supplier Deliveries Abate Further To 20-Month Low

     LONDON (MNI) - The MNI Chicago Business Barometer rose by 8 points to 64.7

in February, to the highest since December 2017. This month's gain was last

matched in February 2017 and surpassed only by the 12.5 points hike recorded in

January 2016.

     Optimism returned in February, with most Barometer components back at

December 2018's level after last month's dip, indicating temporary factors were

at play in January. February's increase was led by four of the five Barometer

components, with only Supplier Deliveries receding.

     The pick-up in demand contributed the most to the Barometer's rise. New

orders rose by 15.2 points, the largest monthly rise since January 2016 when it

jumped 17.4 points. Production was up 8.5 points to a fresh six-month high.

Order Backlogs were up by 5.6 points, offsetting January's decline.

     Supplier delivery times continued to subside in February, the fourth

consecutive decline, hitting the lowest level since June 2017.

     --INVENTORY CONTROL

     Firms kept their inventories under tight control, reflecting the recent

volatile levels of demand. The indicator plummeted below the 50-neutral mark for

the first time in seven months. However, firms may have to reassess their

stockpiling if orders continue to pick up and lead times for raw materials and

capital equipment keep rising.

     The Employment indicator rose to its highest since July 2018, with firms

more willing to add to their workforce. However, concerns remain among some

about finding the right fit of employees to meet their needs.

     The Prices Paid indicator posted a first increase in seven months, easing

the downward pressure seen on prices through the second half of the last year.

Although the indicator was up 6.6% on a year-on-year basis, the trend levels

came in at par with last year, suggesting that prices of some key materials were

still soft.

     --QUESTION TIME

     This month's special question asked firms how another interest rate hike

would impact their business. 48.9% of firms believed a rate hike would adversely

impact their business, while 46.7% didn't expect any impact, leaving only a

minority of firms expecting to benefit from a rate hike.

     Firms were also asked if the lack of agreement in ongoing trade impacted

their business strategies. A majority of firms, at 42.6%, said this had

negatively impacted them, while a quarter said they were immune.

     "The sharp pick-up in the Barometer to a level not seen in over a year,

underpinned by the growth in demand and production, showcases a healthy image of

the US economy," said Shaily Mittal, Senior Economist at MNI Indicators.

     "With the Fed's cautious approach towards monetary tightening along with

soft inflation, firms remain optimistic about their business activity," she

added.

     The survey period ran from February 4 to 18.

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

--MNI London Bureau; +44 203 865 3828; email: jai.lakhani@marketnews.com

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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