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Key Points – March Report
The Chicago Business BarometerTM, produced with MNI, rose to 66.3 in March, the highest level since July 2018. Through Q1 the index gained 4.4 points to 63.2, the strongest reading since Q3 2018.
Among the main five indicators, Production saw the largest gain, while Order Backlogs saw the biggest drop.
Production jumped 10.1 points in March and now stands at a 3-year high, while production increased to 68.4 in Q1, its highest level since Q4 2017. New Orders increased 7.1 points in March, while the quarterly index improved to 61.3 in Q1. Companies were optimistic in March and noted that business is picking up.
Order Backlogs was the only major category to fall in March, down 6 points. However, over Q1 the index rose to 60, its highest level since Q3 2018.
Inventories ticked up 5.1 points in March, leaving the indicator above the 50-mark for a third consecutive month, mainly driven by supply chain issues. Quarterly inventories rose to 53.7 in Q1.
Employment shifted into expansion territory in March, up 5.5 points, the first reading above 50 since June 2019. Employment rose to 49.0 in Q1.
Supplier Deliveries lengthened to a 47-year high in March, surpassing April’s recent peak when supply chain issues pushed the index up to 77.5. In Q1 the index rose to 73.8, its highest level since Q2 1974.
Prices paid at the factory gate escalated for the seventh month in a row and the index now stands at the highest since August 2018. Quarterly prices rose to 76.9 in Q1. Anecdotal evidence suggests that prices for steel continued to rise in March.
This month’s special question asked, “As the first quarter of 2021 comes to an end, are you planning to amend your inventory position due to any of the following conditions?” The majority, at 67.6%, planned changes to their inventory levels due to supplier leadtimes, while 43.2% noted logistical issues as a reason.
