.jpg)
Key Points – December Report
The Chicago Business BarometerTM, produced with MNI, edged up to 59.5 in December. Through Q4 as a whole, business sentiment recovered further to 59.6, the strongest reading since Q4 2018.
Among the main five indicators, Employment saw the largest monthly gain, followed by Order Backlogs. New Orders recorded the biggest decline.
Demand eased in December as New Orders slipped 2 points, while Production ticked up by 1.1 points as business activity picked up. On a quarterly basis, both New Orders and Production jumped to a 2-year high, pushing the indices up to 61.0 and 61.6, respectively.
Order Backlogs grew 3.6 points in December, second consecutive advancement. In Q4 the index rose to 52.3, lifting the indicator above the 50-mark for the first time since Q1 2019.
Inventories jumped to a seven-month high in December, leaving the quarterly index at 47.6 in Q4.
Employment saw the largest climb in December, rising to a one-year high. Nevertheless, the indicator has now been in contraction territory since July 2019. Quarterly demand for labor progressed to 45.3 in Q4.
Supplier Deliveries showed little change in December with companies continuously noting delivery delays due to issues with shipping and trucking.
Prices paid at the factory gate expanded 2.2 points, hitting the highest level since September 2018, with firms reporting higher prices for metals. In Q4, the index rose to 71.8, the highest level since Q3 2018.
This month’s special question asked, “What is your planned business activity forecast for 2021, by percent?”. The majority (44.9%) sees growth below 5%, while 42.9% expect growth to be between 5% and 10%. The second question asked, “As vaccine(s) roll out over the next few months, have you made plans to adjust your 2021 budget, in which period?”. The majority does not know yet if they will adjust their 2021 budget.
