Chicago-area business activity unexpectedly contracted at a faster rate in the month of May, according to a report released by MNI Indicators on Friday.
MNI Indicators said its Chicago business barometer dropped to 32.3 in May from 35.4 in April, with a reading below 50 indicating a contraction in regional business activity. Economists had expected the barometer to rise to 40.0.
With the unexpected decrease, the Chicago business barometer dropped to its lowest level since March of 1982.
The drop by the business barometer came as the new orders index fell to its lowest level since July of 1980 and the production index saw further downside after falling sharply in the previous month.
Meanwhile, the employment index rebounded after April’s drop, although MNI Indicators noted anecdotal evidence was mixed with some firms stating they had to lay off staff or reduce salaries, while others were trying to find new hires.
The prices paid index also increased, as companies noted higher prices for essential goods and transportation.
MNI Indicators said respondents had diverging opinions when asked how long they expect the coronavirus pandemic to impact their business plans.
While 27.1 percent expect COVID-19 to have an impact for 6-9 months, 22.9 percent forecast 9-12 months and 20.8 percent project 3-6 months.