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(M1) Bearish Focus

MNI (London)
--Chicago Business Barometer 42.9 in Jan vs 48.2r Dec
--Order Backlogs and New Orders Led Fall; All Major Components Decline
By Irene Prihoda
     LONDON (MNI) - The Chicago Business Barometer fell to 42.9 in January, the
lowest level since December 2015, following two consecutive months of gains that
saw the index hit December's downwardly revised 48.2.
     Business sentiment fell further into contraction, with the three-month
average falling to 45.9.
     All five major components of the headline index saw a monthly decline, with
Order Backlogs leading the way lower, followed by New Orders.
     The main points of note from the release follow:
     -- The headline index plummeted to a 49-months low and has now been in
contraction for seven consecutive months. Business confidence weakened sharply
throughout 2019 an sees a disappointing start to 2020 with four of the five sub
components having seen readings below the 50-mark for several months.
     -- Demand weakened in January, highlighted by New Orders falling 6.1 points
to 41.5. Production cooled by 3.8 points to 42.7, the lowest level since July
     -- Order Backlogs slipped to a four-year low in January, showing the
largest monthly fall in both points and percentage terms, leaving the index 10.1
points lower at 34.6. Since March 2019, the indicator has only recorded one
reading above the 50-mark.
     -- After December's uptick, Inventories eased by 5.8 points to 40.2,
marking the lowest level since May 2016 and the sixth consecutive sub-50
     -- Employment remained broadly unchanged with the index decreasing by just
0.2 points to 47.0.
     -- Supplier Deliveries edged down to 53.3 in January, now the only one
major component above the 50-mark.
     -- Prices at the factory gate ticked down by 2.1 points to 56.1,
registering a two-month low.
     -- January's special question asked, "Will the signing of the USMCA
agreement improve your supplier lines?". The majority (60%) anticipate no
improvement at all, while 40% expect little changes. The second question asked,
"What is your planned business activity forecast for 2020?". The majority (50%)
expect average growth to be below 5%, while 43.2% see growth between 5% and 10%.
Only 6.8% project growth to be above 10%. 
--MNI London Bureau; +44 0203 865 3814; email:
--MNI London Bureau; tel: +44 203-586-2225; email:
MNI London Bureau | +44 203-865-3812 |