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Key Points – October Report
The Chicago Business BarometerTM, produced with MNI, eased to 61.1 in October, edging lower after a sharp increase in September. However, it still marks the fourth consecutive reading above the 50-mark after sitting below it for a year.
Among the five main indicators, New Orders was the only category to show a monthly uptick, while Production recorded the largest decline.
Demand picked up modestly in October with New Orders rising 0.2 points, its highest level since November 2018. Production saw the largest fall, falling 5.9 points. Anecdotal evidence provided mixed signals, with some firms noting a drop in demand, while others saw a stable level of orders and production or a gradual improvement in business activity.
Order Backlogs eased 2.4 points to a two-month low. The index remains in expansion territory for the second month in a row.
Inventories cooled marginally by 0.2% in October, little changed from the 47.8 recorded in September.
Employment is the only major category to record a sub-50 reading. It backtracked in October with firms noting staff reductions as a result of the pandemic.
Supplier Deliveries eased in October with firms emphasising the impact of the current crisis.
Prices at the factory gate were stable in October, dipping 0.1 points with firms reporting higher prices for wood, steel and chemicals.
This month’s special question asked: “Are you planning to make working remotely a permanent option for your employees after the pandemic?”. The majority 45.8% were unsure, 35.6% are not planning to make it a permanent option, while 18.6% support it. The second question asked: “Have you re-evaluated your supply chains, attempting to take China out of the equation?”. The majority 47.4% had not re-evaluated their supply chains, while one third of respondents had adjusted their supply chains.
