Chicago Business Barometer Indicates Continued Deceleration In October
October 31 2018 - 6:19AM
RTTF2
Growth in Chicago-area business activity decelerated for the
third straight month in October, according to a report released by
MNI Indicators on Wednesday.
MNI Indicators said its Chicago business barometer fell to 58.4
in October from 60.4 in September, although a reading above 50
still indicates growth. Economists had expected the index to edge
down to 60.0.
The bigger than expected drop by the business barometer came as
a decline in order book growth and unfinished orders more than
offset a rise in output, delivery times and employment.
"The MNI Chicago Business Barometer continued to revert back
towards trend-levels in October, cooling off after a hot and
unsustainable run last year," said Jamie Satchi, Economist at MNI
Indicators. He added, "Production continues to be restrained by
issues between firms and their suppliers, reflected by Supplier
Deliveries at a 14-year high, while the latest raft of tariffs on
Chinese goods appears to be exacerbating uncertainty across
firms."
The report said the new orders index fell for the sixth time
this year, hitting its lowest level since January of 2017. The
order backlogs index also receded to a level last seen lower in
April, when it slipped below the neutral mark for the first time in
13 months.
On the other hand, the output index increased marginally and the
employment indicator rose for the first time since July.
MNI Indicators also said the supplier deliveries index reached
its highest level in over fourteen years, with some firms
attributing the increasing wait times to under-staffed
suppliers.
The prices paid index remained locked in a historically elevated
range, as some firms saw higher unit prices on invoices for the
first time, on the back of further import tariffs levied on China,
while others expect shortages to push prices higher over the coming
months.
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