By Xavier Fontdegloria
Business activity in the Chicago area gained momentum in March as production and demand strengthened, data from a survey compiled by MNI Indicators showed Thursday.
The Chicago Business Barometer rose to 62.9 in March from 56.3 in February, topping the 57.0 consensus forecast from economists polled by The Wall Street Journal.
The barometer is compiled after surveying firms in the Chicago area to assess business conditions. Readings above 50 point to expansion of activity, while below 50 indicate contraction.
The index takes into account five components: new orders, order backlogs, production, supplier deliveries and employment. All five components increased in March compared with the previous month.
The production index rose to 60.0 as firms noted modest improvements in material shortages that allowed a boost in output, the report said.
The new orders index rose markedly to 61.9, although it was still below January’s levels, it said.
The employment index increased to 48.1, but remained in contraction territory. Firms saw employment levels improve over the month, but hiring skilled workers remained a challenge, MNI Indicators said.
The supplier deliveries index edged up slightly to 78.3, signaling that supply-chain issues didn’t improve significantly. Order backlogs also remained high due to material and chip shortages.
The inventories index rose to a near five-decade high in March as firms stocked up due to supply-chain disruptions, the report said. Just over half of the respondents said that they weren’t seeing any easing in the supply-chain bottlenecks, while around 36% reported some improvement.
Prices pressures remained high, according to the survey. The prices paid index fell slightly to a still elevated 85.7, the report said.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
(END) Dow Jones Newswires
March 31, 2022 10:23 ET (14:23 GMT)
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Read More: Chicago Business Activity Picked Up Pace in March — MNI Indicators