The widely watched Chicago Purchasing Managers Index fell to 32.3 in May, hitting its lowest level since the recession year of 1982 as the COVID-19 pandemic slammed business confidence.
Among the Index’s individual components, demand fell further after its largest drop ever during April. Meanwhile, the new orders component eased 2.3 points to its lowest reading since July 1980. Order backlogs likewise tumbled 28 percent to their lowest level since March 2009 during the Great Recession.
All in all, the Index – which is also known as the Chicago Business Barometer – hit a 40-year low in May and marked its ninth consecutive month of a sub-50 reading, which indicates contraction.
And although the Index’s employment component rebounded following a big April drop, “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,” according to ISM-Chicago Inc. and MNI Indicators, which jointly produce the report.
Some 27.1 percent of purchasing managers surveyed told the two firms that they expect COVID-19 to impact their businesses for six to nine months. Another 22.9 percent forecast nine to 12 months of problems, while 20.8 percent foresaw three to six months of impact and 18.8 percent predicted issues will continue for more than a year. By contrast, just 10.4 percent of poll respondents expect COVID-19-related problems to end in less than three months.