Chicago PMI declines less than expected in March
By Michele Maatouk
Date: Tuesday 31 Mar 2020
(Sharecast News) - Economic activity in the Chicago area deteriorated less than expected in March, according to figures released on Tuesday.
The MNI Chicago business barometer fell to 47.8 from 49.0 in February, coming in above consensus expectations for a reading of 40.0 but below the 50.0 mark that separates contraction from expansion for the ninth consecutive month.
Among the main five indicators, production and new orders saw the only monthly declines, while supplier deliveries recorded the biggest gain. Production shifted back into contraction in March after February's rise above 50.0, while demand for new orders fell by 7.9%.
Some firms reported a rise in orders due to stockpiling by US customers, but others noted a fall in new business because of the coronavirus outbreak.
Pantheon Macroeconomics said: "The overshoot to consensus looks like a pleasant surprise, but forecasts at this point essentially are guesses, and we'd be confident in saying that this will not mark the floor for the Chicago PMI. It was already under pressure from the collapse in orders for Boeing aircraft - the company's HQ is in Chicago - so the incremental downward pressure from the mid-month Covid-19 lockdowns was less severe than in the Philly Fed, Empire State and Dallas Fed indexes, all of which saw record drops.
"Then again, the Richmond Fed index rose slightly this month, so the pattern across the country is not uniform. Still, the astonishing compression in demand means that the modest dip in the Chicago index will be followed by further declines, with the low likely to be close to the December 2008 low, 32.5."
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