The Chicago Business Barometer, also known as the Chicago Purchasing Manager’s Index (PMI), is a monthly indicator meant to be a “regional view of the national economy.” The report uses a survey of ISM Chicago members who are Purchasing and Supply Management professionals and polls their opinions on current conditions within their respective businesses.
The index is released a day before the broader, more impactful Institute for Supply Management (ISM) Manufacturing PMI and is published by the same group. Both indexes are important to track as they are reliable gauges of current business conditions of the manufacturing sector.
This month’s Chicago PMI came in at 48.6 for April, up from its March reading and much better than expected, though its eighth consecutive contractionary month (below 50.0). All subindexes except for Order Backlogs and Inventories saw increases in April, with Employment out of contractionary territory for the first time in August 2022. Firms provided anecdotal evidence suggesting “successful recruitment activity” for Employment in April and easing of supply chain blockages that supported order backlogs. Despite the better-than-expected monthly report, consumers won’t feel the benefit – at least not yet – as fewer than 20% of respondents said they would reduce selling prices in the coming months.