Chicago business activity growth slows in April

MNI Indicators’ report revealed on Tuesday that the expansion of business activity in Chicago slowed this month.

The MNI Chicago Business Barometer, also known as Chicago purchasing manager's index (PMI) came in at 52.6 in April, down from an unrevised 58.7 in March. That was the lowest reading since October 2016.

Economists had forecast the index to increase to 59.

A reading above 50 indicates improving conditions, while a reading below this level shows worsening of the situation.

According to the report, four of the five Barometer components declined in April, with the new orders falling for the second consecutive month. The production dropped significantly to a level not seen since May 2016, while the employment indicator softened to the lowest level since October 2017 and the factory gate prices saw the biggest monthly fall since December 2008. Meanwhile, the order backlogs component was the sole gainer.

“This was a disappointing start to the second quarter, with more firms cutting back on both production and employment against a backdrop of softer domestic demand and the global slowdown,” said Shaily Mittal, Senior Economist at MNI. “Most Barometer components have dived below their respective 12-month averages, pointing towards greater business uncertainty among firms,” she added.