Chicago-Area Business Activity Eases Slightly in February -- MNI
26 February 2021 - 3:33PM
Dow Jones News
By Xavier Fontdegloria
Business activity in the Chicago area slowed in February
compared with January, data from MNI Indicators showed Friday.
The Chicago Business Barometer stood at 59.5 in February, down
from 63.8 in January. Economists polled by The Wall Street Journal
expected the index to come in at 61. The downtick comes after a
sharp increase in the previous month, when the indicator rose to a
two and a half year high.
The barometer is compiled every month after surveying purchasing
and supply management professionals in the Chicago area, who are
polled to assess business conditions for their respective
companies. Readings above 50 point to expansion of business
activity in the region, while readings below 50 indicate
contraction. The indicator has been in expansion territory since
July last year.
Among the main five indicators that form the barometer, new
orders saw the largest monthly decline, followed by production,
while employment recorded gains, MNI said.
Demand eased markedly in February with new orders dropping 11
points, its lowest level
since August 2020. Similarly, production shed 9.3 points,
following two consecutive months of gains.
"Anecdotal evidence provides a mixed picture, with some firms
experiencing a downturn due to the pandemic, while others report
strong consumer demand," the report said.
Order Backlogs edged higher for the fourth successive month to
the highest level since October 2017, while inventories declined
4.6 points but remained in expansion territory.
Supplier deliveries inched up 1.6 points, its highest level
since May and recorded the third highest reading since the start of
the pandemic.
Employment rose 5.7 points to a 16-month high. The index has
been in contraction territory since July 2019.
Prices paid at the factory gate edged marginally higher, up 0.1
points, reaching the highest level since September 2018.
To the question of how did respondents cope with disruption in
2020, more than 40% said they increased their safety stocks, while
almost 23% either implemented new technology or diversified
suppliers.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
(END) Dow Jones Newswires
February 26, 2021 10:18 ET (15:18 GMT)
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