Chicago PMI shows limited coronavirus effect

The Chicago Business BarometerTM, produced with MNI, edged up 6.1 points in February to 49.0,the highest level since August 2019. The index moved closer to the 50-no-change-threshold, shifting the three-month average up to 46.7. 

Among the main five indicators, Production and Supplier Deliveries showed the greatest gains, while Employment was the only one to decline. 

Production gained 8.3 points to 51.0, hitting an eight-month high. The index shifted back into expansion following seven straight months below 50. Demand for New Orders strengthened in February, rising by 7.6 points to 49.1, the highest level since August 2019. 

After dropping to a four-year low in January, Order Backlogs rose slightly to 38.2 in February. However, the index remained in contraction since September 2019. Inventories rose 7.8 points, reaching a six-month high of 48.1 in February, although recording the seventh sub-50 reading. 

Employment slipped to 44.5, slipping 2.4 points to the lowest level since July 2019. Supplier Deliveries surged up to its highest level since November 2018, rising by 7.9 points to 61.3, with anecdotal evidence that the coronavirus is already leading to supply chain disruptions. Prices at the factory gate cooled for the second successive month, dipping by 3.2 points to 52.9.