Chicago business activity’s expansion decelerates slightly in September

MNI Indicators’ report revealed on Thursday that business activity in Chicago expanded in September at a slightly slower pace than in August.

The MNI Chicago Business Barometer, also known as Chicago purchasing manager's index (PMI) came in at 64.7 in September, down from an unrevised 66.8 in August. This was the lowest reading since February.

Economists had forecast the index to decrease to 65.0.

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

According to the report, Order Backlogs recorded the largest decline among the main five indicators, plunging 20.5 points to a six-month low of 61.1, as supply shortages continued to weigh on production. It was followed by Supplier Deliveries, which tumbled 11.6 points to 81.2, the lowest level since April, as businesses noted worsening port congestion and ongoing problems with ocean, rail trucking, and even air cargo. In addition, New Orders dropped 3.4 points to 64.4, the lowest since March, reflecting the raw material shortages and a low supply of critical components like semiconductors. At the same time, Employment was the only major indicator that posted increase in September, advancing 4.1 points to 52.4, the highest since April. On the price front, Prices paid at the factory gate fell 3.2 points in September to a four-month low of 90.7, as companies reported fewer problems with labor that may have put downward pressure on prices.