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Chicago Purchasing Managers Index fell 6.1 points to 52.6 in April
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The MNI Chicago Business Barometer fell 6.1 points to 52.6 in April, down from 58.7 in March to the lowest level since January 2017.
The weakness in the Barometer observed in Q1 continued into Q2, with the April fall led by four of the five Barometer components.
Only Order Backlogs increased on the previous month’s reading. New Orders eased for the second consecutive month, dipping below both three- and 12-month averages. Amid weaker orders seen recently, Production pulled back significantly from March, to a level not seen since May 2016.
Order Backlogs picked-up, moving above the 50-neutral level after a brief dip into contraction territory in March. There were reports of increased lead times at both domestic and offshore points, putting pressure on backlogs.
Companies continued to run down their inventories, but less so than last month. The indicator remained just a touch below the 50-mark for the third time in the last nine months.
The pullback in demand and production was matched by reduced demand for labor. The Employment Indicator softened to the lowest level since October 2017, also now hovering below both the three- and 12-month averages.
Supplier delivery times shortened to the lowest reading since April 2017 after remaining broadly steadfast over the last two years.
Factory gate prices saw the biggest monthly fall since December 2008, taking the indicator to the lowest level since March 2016. There was anecdotal evidence of steel leading the fall in prices.
This month’s special question asked firms if they planned to expand their workforce in the next three months. Just over half said they planned to hire more workers. About a third didn’t have the need to add to their workforce and the rest were unsure. Of those who planned on hiring, firms were keener on employing temporary workers over permanent staff.
“This was a disappointing start to the second quarter, with more firms cutting back on both production and employment against a backdrop of softer domestic demand and the global slowdown,” said Shaily Mittal, Senior Economist at MNI.
“Most Barometer components have dived below their respective 12-month averages, pointing towards greater business uncertainty among firms,” she added.
Posted: April 30, 2019 Tuesday 09:45 AM