MNI Chicago Business Barometer Surges to 66.4 in November

--Chicago Business Barometer Surges After Three Consecutive Declines

--Chicago BB New Orders Hits 54-Month High

--Chicago BB Delivery Times Longest Since April 2004

--Chicago BB Prices Paid Remain Elevated

     LONDON (MNI) - The MNI Chicago Business Barometer surged to an 11-month

high of 66.4 in November, up 8.0 points from October's 58.4.

     Business activity recorded its most impressive performance so far this year

in November, ending a three-month run of declines. Although broad-based, with

increases across all five of the Barometer's subcomponents, resurgent orders,

solid output and higher unfinished orders were the month's key drivers.

     This month's result means the Barometer has signalled expansion, sitting

above the neutral 50-mark, for 33 consecutive months. Moreover, the headline

index has registered above-60 for all but three of the past 15 months.

     Compared to a year ago, when export-driven growth spurred global activity,

the Barometer is up 1.2%, returning to growth after two months of decline.

     --SOARING ORDERS

     Driving the November rise were soaring orders and higher output. After

easing in each of the last two months, November saw New Orders jump to the

highest level since May 2014. Production, meanwhile, rose for a second straight

month, settling at a three-month high. Some firms said that while they were

seeing increased orders in November, there were also demands from customers for

earlier delivery on existing orders.

     Order Backlogs, which reversed October's decline and hit a four-month high,

also helped propel the overall index higher. Firms reported labor struggles

continuing to restrain the ability to tackle backlogs over what is considered

the busiest time of the year for many firms.

     Meanwhile, supply-side issues continued to weigh on firms. The Supplier

Deliveries indicator rose to its highest level since April 2004 in November,

with some firms citing delays in sourcing deliveries from low-cost, offshore

countries.

     Having used the previous two months to accumulate stock, firms ate into

these levels in November with the Inventories indicator slipping to a

three-month low. In recent months, firms reported that they accrued stock in

preparation for the upcoming festive season or to protect themselves in

anticipation of higher prices fueled by any further trade disruptions.

     --EMPLOYMENT INDICATOR UP

     Building on October's rise, the Employment indicator strengthened further

in November, hitting a three-month high and moving further clear of the

neutral-50 mark.

     This month's special question built on this, asking whether firms saw labor

issues negatively impacting their business in the New Year. The majority of

firms, 42.6%, were optimistic that this would not be the case but a sizeable

36.2% did foresee issues manifesting, supplemented by the remainder who said

they were unsure.

     Prices data, meanwhile, continued to signal elevated input expenses across

firms. Prices Paid, despite moderating in November, are still hampering firms'

operations. Some firms reported an increase in costs across a range of goods

while others said they were in the process of renegotiating contracts.

     "The MNI Chicago Business Barometer clipped a run of three consecutive

declines in emphatic style in November, boosted primarily by resurgent orders --

stronger than typically seen at this time of year and enough to push the

Barometer to its best level since last December," said Jamie Satchi, Economist

at MNI Indicators.

     "However, many firms reported seeing the effects of higher China tariffs on

their invoices for the first time, and voiced concern that business could be

stifled going forward," he added.

     The survey period ran from November 1 to November 20.

--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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