By Xavier Fontdegloria
Business activity in the Chicago area lost some momentum in September compared with the previous month, according to data from MNI Indicators released Thursday.
The Chicago Business Barometer decreased to 64.7 in September from 66.8 in August, the lowest reading since February and broadly matching economists expectations, who polled by The Wall Street Journal expected it to come in at 65.0.
The barometer is compiled after surveying companies in the Chicago area to assess business conditions. Readings above 50 point to expansion of activity, while readings below 50 indicate contraction. The indicator has signalled growth since July 2020.
The reading takes into account five components: new orders, order backlogs, production, supplier deliveries and employment.
Among the main five indicators, order backlogs saw the largest decline, followed by supplier deliveries and new orders. Employment increased in the month, the report said.
The order backlogs index fell sharply in September to 61.1, a six-month low, with companies linking the decline to supply shortages that constrain production.
Supplier deliveries through September fell to 81.2, the lowest since April, as firms reported worsening port congestion and problems with ocean, rail trucking and even air cargo, the report said.
The new orders index declined in September to 64.4, the lowest since March. Businesses said that was linked to raw material shortages and a low supply of critical components.
The prices paid index dropped slightly to a four-month low of 90.7, with companies reporting fewer problems with labor that may have put downward pressure on prices, MNI Indicators said.
Production in September fell marginally to 60.7, while employment rose to 52.4, the highest level since April.
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(END) Dow Jones Newswires
September 30, 2021 10:16 ET (14:16 GMT)Copyright (c) 2021 Dow Jones & Company, Inc.