Research >> Economics
Chicago Purchasing Managers Index fell 3.1 points to 32.3 in May
|
The Chicago Business BarometerTM, produced with MNI, fell to 32.3 in May, hitting the lowest level since March 1982, as business confidence cooled further amid the Covid-19 crisis.
Among the main five indicators, Order Backlogs and Supplier Deliveries saw the largest declines, while Employment edged marginally higher.
Demand tumbled further into contraction in May after seeing the largest fall on record in April. New Orders dropped by 2.3 points to the lowest since July 1980.
Similarly, Production ticked down 6.3% in May 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 28.0% to 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.
Employment rebounded after April’s drop. 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 ticked down by 5.8% in May following a 46-year high in April.
Prices paid at the factory gate increased to its highest level since March 2020. Companies noted higher prices for essential goods and transportation.
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.
Posted: May 29, 2020 Friday 09:45 AM