By Dean Seal


Activity at manufacturers in the Chicago area contracted for a ninth consecutive month in May as demand cools and hiring remains challenging, data from a survey compiled by MNI Indicators showed Wednesday.

The Chicago Business Barometer fell to 40.4 in May from 48.6 in April, its lowest reading in six months and below the 47.0 consensus forecast from economists polled by The Wall Street Journal.

The index suggests that activity contracted in May, as it came in below the 50 threshold that separates expansion from contraction.

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 declined in May, reversing a rebound last month, with some firms' customers seeing a slowdown in business activity, the report said.

The new orders index also declined to a six-month low and its second-lowest level since June 2020, due at least in part to some firms' customers having previously overordered.

The employment index softened as well, indicating that firms are struggling to hire and retain staff.

The prices paid index cooled to its softest level since August 2020, suggesting that demand has weakened. The passthrough of lower commodity prices from suppliers remained slow and moderate, the report said.


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(END) Dow Jones Newswires

May 31, 2023 10:52 ET (14:52 GMT)

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