MNI DATA IMPACT: Apr Chicago Biz Slumps Amid Covid-19 Crisis

-- Chicago Business Barometer 35.4 in April vs 47.8 in March

-- New Orders and Production Collapse; Supplier Deliveries Highest Since 1974

By Irene Prihoda

     LONDON (MNI) - The Chicago Business Barometer plunged in April to a level

last seen during the Global Financial Crisis, as business confidence dropped

sharply amid the ever-quickening spread of the Covid-19 outbreak.

     Among the main five indicators, New Orders and Production registered the

largest declines, while Supplier Deliveries surged.

     The main points of note from the release follow:

     - The headline index fell 12.4 points in April to its lowest level since

March 2009 as business confidence dipped sharply in the wake of the crisis.

     - Production dropped by 19 points to 25.3 in April, hitting the lowest

level since June 1980. After slipping to 45.2 in March, demand faded to a near

40-year low in April, falling to 24.2. April's 21-point drop in New Orders was

the largest decline on record as firms noted a severe negative Covid-19 impact

on both demand and production.

     - Order Backlogs waned 3 points to 37.3 after two consecutive months of

gains. However, the index recorded an eighth consecutive sub-50 reading.

     - Inventories rose substantially with the index increasing by 13.6 points

to 48.2, but remained below the 50-mark for a ninth successive month.

     - The demand for labor cooled significantly, with Employment falling 11.1

points to 33.8, the lowest level since June 2009. There was anecdotal evidence

that firms reduced staff levels in order to mitigate the negative effects of the

coronavirus on business activity.

     - Supply Network limitations are further impacting Supplier Deliveries

which surged to 78.9, its highest level since April 1974. There was, however,

anecdotal evidence of improved delivery times from China.

     - Prices at the factory gate fell below the 50-mark in April, slipping by

8.3 points to 48.4, the lowest level since March 2016.

     - This month's special questions asked "Have you taken actions to mediate

supply issues amid the corona crisis?" The majority, at 52.9%, reported a few

changes, while 43.1% said they had undertaken major changes. Only 3.9% of

respondents noted they had made no changes. Measures taken by firms range from

reviewing their supply chains, to working remotely and increased cleaning.

     - This month's survey ran from April 1 to 20.

--MNI London Bureau; +44 0203 865 3814; email: irene.prihoda@marketnews.com

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

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