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By Hollie Silverman and Andrew Stanton
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Data from a key indicator for the economic health in the manufacturing industry has shown a significant slowdown in the growth in the Chicago area.
Why It Matters
Americans are facing economic concerns including rising inflation and gas prices amid the Iran war. Seventy-two percent of Americans rate the economy as either fair or poor, while only 24 percent say it is in good or excellent condition, according to a recent YouGov/The Economist poll of 1,679 adults from March 27 to 30. The latest numbers for the Chicago Purchasing Managers' Index are the latest red flag for the state of the economy as the Iran war continues.
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What To Know
The Chicago Purchasing Managers’ Index (PMI) data showed a reading this month of 52.8, which fell short of the forecasted 54.8. While the numbers still show growth in the sector, the pace has significantly slowed, the data shows. Investing.com described the reading as a "bearish signal for the U.S. dollar."
The data is a key indicator monitored by investors for clues about the health of the U.S. manufacturing sector, particularly as it relates to the national ISM Manufacturing PMI.
A reading above 50 signals expansion, while a figure below 50 indicates contraction. Although the latest reading remains in expansion territory, it points to a slowdown in the pace of growth within the sector. The reading is also lower than the 57.7 reading in February.
The data comes as the U.S. continues to see a rise in the prices of everyday goods, including gas, amid the Iran war.
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Gas prices have surged past $4 per gallon for the first time in more than three years, according to data from GasBuddy, as the Iran war continues to disrupt global oil supplies.
A press release from MNI Market News said the decline “was driven by Employment, Production and New Orders” while increases in order backlogs and supplier deliveries “provided some offset.”
“Employment weakened 12.8 points, now back in contractionary territory after one month above 50. However, the index remains considerably above levels seen at the end of 2025,” the report reads.
It also found that production lightened by 9.3 points, new orders softened by 7.8 points but remained above 50 and that order backlogs grew 6.4 points. Supplier deliveries rose 4.9 points, while prices paid grew 3.4 points. Inventories also increased 5.4 points.
What Is the Chicago PMI?
The Chicago PMI "serves as a key indicator of the economic health of the manufacturing industry," according to Investing.com, which notes that it is watched to see insights into the national manufacturing landscape.
"For more than seven decades, the Chicago Business Barometer has been providing leading insight on the U.S. economy. The Chicago Business Barometer is delivered to subscribers via the MNI Chicago Report, a monthly report published by MNI Indicators that presents valuable information on the U.S. economic activity and a fresh look at current U.S. business conditions. The report consists of seven Business Activity indicators and three Buying Policy indicators that represent activity and performance levels compared to the prior month," the Institute for Supply Management website reads.
The survey data is collected online monthly from Chicago-area from manufacturing and non-manufacturing firms. Respondents are asked whether a particular business activity have increased, decreased or stayed the same with the previous month.
Update 3/31/26, 11:32 a.m. ET: This article was updated with additional information.
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