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Chicago Business Barometer 63.8 January Vs 58.7 January
The Chicago Business Barometer rose in January, with the headline index higher by 5.1 points at 63.8, hitting the highest level since July 2018, boosted by a pick-up in activity at the beginning of 2021. The gain was in contrast to financial market expectations of a decline on December's number.
Among the main five indicators, Production saw the largest monthly gain, followed by New Orders. Employment recorded the biggest decline.
Production surged 9.9 points to 71.3 in January, the highest level since January 2018. Firms noted an uptick in output compared to December, a month that often sees slower production due to the holidays. Demand picked up as well with New Orders surging by 7.9 points to 66.2, the highest level since November 2018.
Order Backlogs grew for the third consecutive month, higher by 6.9 points to a 23-month high of 60.1. The indicator has been in expansionary territory since September 2020. Meanwhile, Inventories continued to rise, up 6.2 points to the highest level since October 2018. The index stands at 55.1 in January, the first above the 50-mark since May.
Employment showed the largest monthly decline and slipped 4.5 points to 43.4 in January, the nineteenth straight reading below the 50-mark.
Supplier Deliveries eased slightly, down 0.5 points in January, but remain elevated at 69.9. Anecdotal evidence suggested logistical issues and freight backups leading to delays. Prices paid at the factory gate increased for the fifth consecutive month, rising to 75.2 in January, its highest level since September 2018. Manufacturing firms specifically noted higher prices for steel.
This month's special question asked, "How is the recent increase in Covid-19 infection rates affecting your business?" The majority, at 50%, reported a mild negative impact of the recent increase in Covid-19 cases on business, while 31.8% had no impact on their activity. Just 2.3% of respondents saw a strong positive impact on their business and 15.9% noted a strong negative effect.
The January survey ran from January 4 to 18.