MNI DATA IMPACT: Feb Chicago Biz Barometer At 6-Month High

--Chicago Business Barometer 49.0 in Feb vs 42.9 Jan

--Production and Supplier Delivery Led Increase; Employment Component Falls

By Irene Prihoda

     LONDON (MNI) - The Chicago Business Barometer edged up to 49.0 in February,

hitting the highest level since August 2019. The index moved closer to the

50-no-change-threshold following January's drop to a four-year low.

     Production and Supplier Deliveries drove the increase, followed by New

Orders and Order Backlogs.

     There was anecdotal evidence from respondents that the coronavirus started

to affect business -- especially supply chains.

     The main points of note from the release follow:

     - The headline index improved significantly in February, rising to the

highest level since August 2019. However, business confidence remained in

contraction territory for the eighth month running. Four out of the five major

components revealed monthly gains, while Employment fell slightly.

     - Production jumped 8.3 points to 51.0, hitting an eight-month high. The

index shifted back into expansion following seven straight months below 50.

Demand strengthened in February, rising to 49.1, the highest level since August

2019.

     - After dropping to a four-year low in January, Order Backlogs inched

higher to 38.2 in February. However, the index has been in contraction since

September 2019.

     - Inventories rose 7.8 points, reaching a six-month high of 48.1 in

February, although recording the seventh sub-50 reading.

     - Employment slipped to 44.5, slipping 2.4 points to the lowest level since

July 2019.

     - Supplier Deliveries surged to its highest level since November 2018,

rising by 7.9 points to 61.3, including anecdotal evidence that the coronavirus

is already leading to supply chain disruptions. Companies reported longer

delivery times for Chinese products due to delayed shipments from China.

     - Prices at the factory gate cooled for the second successive month,

dipping 3.2 points to 52.9.

     - February's special question asked "Will the signing of the Phase 1 deal

with China/Epidemic have any impact on your business?" The majority 45.7%

reported little impact, while 30.4% noted no impact at all and 23.9% mentioned a

large impact. The second question asked "Have Boeing's ongoing issues had an

impact on your business?" The vast majority, 91.3%, said they are not affected

by Boeing's ongoing issues, while 8.7% are.

--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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