By Xavier Fontdegloria

Economic activity in the Chicago area shrank sharply in November, signaling the economic slowdown in the region is broadening, according to data from a survey compiled by MNI Indicators released Wednesday.

The Chicago Business Barometer fell to 37.2 in November from 45.2 in October, missing the 47.0 consensus forecast from economists polled by The Wall Street Journal. This marks the lowest reading since the Global Financial Crisis, excluding the 2020 pandemic-related shock.

The indicator suggests activity contracted at a steeper pace compared with the previous month as it stood further below the 50 threshold which indicates growth.

The barometer is compiled after surveying firms in the Chicago area to assess business conditions. The index takes into account five components: new orders, order backlogs, production, supplier deliveries and employment.

The production index fell sharply to 35.9, posting a third-consecutive contraction as low order levels dampened output. Close to 90% of those surveyed said production in November stalled or decreased on month, the report said.

The new orders index declined to 30.7, with firms reporting weak demand conditions due to inflation concerns, higher inventories and a slowing housing market. Orders backlogs also fell sharply, according to the survey.

The employment index increased somewhat to 47.1 but remained in negative territory, suggesting broadly unchanged employment levels.

The supplier deliveries index declined to 49.9, close to prepandemic levels, in a sign that supply-chain bottlenecks continued to ease. However, lead times remained historically long and transparency issues persist, the report said.

The prices paid index also moderated to 66.2, suggesting easing price pressures, MNI Indicators said.

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

(END) Dow Jones Newswires

November 30, 2022 10:19 ET (15:19 GMT)