CHICAGO, May 31 (Xinhua) -- The Chicago Business Barometer rose 5.1 points to 62.7 in May, up from 57.6 in April and hitting the highest level since January, according to the Institute for Supply Management Chicago.
Business activity accelerated in May, with growth in firms' operations up for the second time this year. All five barometer components rose in the month, boosting the barometer's year-over-year growth back into the black.
To be specific, the barometer's gain was largely driven by an acceleration in both output levels and orders. Having ended a run of three consecutive falls in April, the Production indicator rose to a three-month high; New Orders also increased to a four-month high in May, the first sign of order book growth this year. The two indicators account for two thirds of the headline index, and stand 3.7 percent and 2.1 percent above their respective May 2017 levels.
Companies' unfulfilled orders surged in May. The Order Backlogs indicator ended a run of four straight declines and rebounded to a level last seen higher in October 2017.
A contributory factor to the rise in backlogs were elevated lead times on key supplies. The Supplier Deliveries indicator inched up 12.4 percent on the year. Growth in firms' level of stock also grew in May.
Firms were more optimistic regarding their workforce in May with the Employment indicator bouncing back from last month's six-month low.
Despite receding from April's seven-year high, the Prices Paid indicator remained fixed in a range last seen as high since 2011, the last time it remained above the 70-mark for two straight months.
"It had been a somewhat sluggish start to the year. But the Chicago Business Barometer found a higher gear in May... The rise was largely thanks to a rebound in demand and back-to-back growth in output," said Jamie Satchi, economist at MNI Indicators.
"The result was, however, assisted by the intensification of supply side constraints, with order backlogs surging and lead times on key materials up sharply," he added. Enditem
