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-- Chicago Business Barometer 32.3 in May vs 35.4 in April
-- Order Backlogs Plummet; Production and New Orders at 40-year lows
By Irene Prihoda
LONDON (MNI) - The Chicago Business Barometer fell to the lowest level in
almost four decades in May, as the US economy continued to be buffeted by the
effects of Covid-19.
Among the main five indicators, Order Backlogs and Supplier Deliveries saw
the largest declines, while Employment edged marginally higher.
The main points of note from the release follow:
- The headline index slipped 3.1 points in May to 32.3, its lowest level
since March 1982, as business confidence cooled further amid the Covid-19
- Demand tumbled further into contraction in May after seeing the largest
fall on record in April. New Orders dropped by 2.3 points to 21.9, the lowest
since July 1980. Similarly, Production ticked down 1.6 points in May to 23.7
after falling sharply in the previous month. The index remained at a 40-year low
as firms reported pandemic-induced temporary shutdowns.
- Order Backlogs saw the biggest drop, down 10.4 points to 26.9, the lowest
level since March 2009. This marks the ninth consecutive sub-50 reading.
- Inventories rose further in May, with firms noting a higher level than
needed. The index gained 4.1 points to reach an eleven-month high of 52.3.
- Employment edged up 3.2 points to 37.0. However, anecdotal evidence was
mixed with some firms stating they had to lay off staff or reduce salaries,
while others were trying to find new hires.
- Supplier Deliveries pared down by 4.6 points in May but remain elevated.
The index stood at 74.3 after recent high in April 2020.
- Prices paid at the factory gate increased to 53.8, its highest level
since March 2020. Companies noted higher prices for essential goods and
- This month's special question asked: "How long do you expect COVID-19 to
impact your business plan(s)?" Opinions diverged, with the majority, at 27.1%,
expecting Covid-19 to have an impact for 6-9 months, while 22.9% forecast
9-12months and 20.8% project 3-6 months. While 18.8% expect an impact on
business plans for more than a year, only 10.4% see the impact last for less
than 3 months.
- The Maysurvey ran from May 1 to 18.
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