Declining orders drag Chicago PMI lower for sixth consecutive month in May
Factory sector activity in the Chicago area continued to slow for the sixth consecutive month in May, according to the latest survey results. The Market News International’s purchasing managers’ index dropped by 2.5 points from the previous month, reaching 35.4. Any reading below 50 points on the index indicates shrinking levels of activity.
The main reason for the decline in the index was falling orders. Subindices tracking new orders and order backlogs both fell to levels last seen in May 2020. New orders dropped by 9.2 points, while order backlogs fell by 8 points, undoing the previous month’s gains. On a positive note, the subindex for output levels rose by 8.1 points to its highest level since January.
Despite the overall decline, the subindex for prices paid slipped by only 0.9 points. This suggests that while activity may be slowing, there has not been a significant increase in costs for manufacturers in the Chicago area.
In conclusion, the latest Chicago PMI numbers paint a picture of continued challenges for the factory sector in the region. With declining orders and backlogs, manufacturers are facing tough conditions. However, the rise in output levels provides a glimmer of hope for potential recovery in the coming months.
