By Xavier Fontdegloria
Business activity in the Chicago area improved slightly in June as the region continued to reopen, data from MNI Indicators showed Tuesday.
The Chicago Business Barometer stood at 36.6 in June, up from May's 32.3, which posted the lowest level in almost four decades.
Economists polled by The Wall Street Journal had expected the barometer to be at a higher level of 45.0.
The barometer is compiled every month after surveying purchasing and supply management professionals in the Chicago area, which are polled to assess business conditions for their respective companies.
Despite registering the first improvement in the last three months, the barometer shows that economic activity in the region is still declining compared with the previous month, as an index reading above 50 indicates expansion and below 50 it signals contraction.
In February, before the pandemic hit the U.S., the barometer stood at 49.0.
Among the main indicators of the barometer, production and new orders saw the largest monthly gains, while supplier deliveries and employment faltered, MNI Indicators said.
The production subindex saw the biggest jump in June, rising by 10.1 points. "Demand strengthened by 33.8% in June, while the quarterly figure fell to the lowest level in 40 years," the report said.
Order backlogs gained five points in June, reaching a two-month high. Inventories dropped by 24.7% in June after rising above 50 in May for the first time in 10 months, MNI Indicators said. The employment subindex remained in negative territory for 12th consecutive month.
Across the second quarter, overall business sentiment in the region slipped 11.8 points to 34.8, hitting the lowest level since the first quarter of 2009. In the same period, the production index dropped to a series low.
To the question if respondents plan changes on their workforce, 55.8% of the companies polled said they plan a hiring freeze, while 23.3% expect to lay off employees. Only 18.6% among the polled projected expanding their workforce.
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
June 30, 2020 10:23 ET (14:23 GMT)
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