CHICAGO (MNI) – The following was included in the latest Chicago
Business Barometer report Thursday:

Highlights

Following reports of accelerating recovery in the fall, the Chicago
Business Barometer soared further in December, showing a surprising
strength of economic expansion.

The strong Business Barometer was driven by robust New Orders and
Production readings, bolstered by a significant leap in Order Backlogs
and sustained by healthy Employment and Supplier Deliveries.

New Orders picked up steam in December, shrinking the gap to nearly
meet Production while reaching its highest level since March 2005.
Meanwhile, Production continued to improve similarly, showing breadth
not seen since October 2004.

Consistent with gains in both Production and New Orders, both Order
Backlogs and Inventories showed significant builds with Backlogs
jumping to levels unseen for the index since 1988, and Inventories at
the strongest point in four years. Employment echoed the positive
movement, chalking up another month of expanding recovery, with an
eleventh month of a majority of firms reporting stable or increasing
employment in 2010, and the strongest value since April 2005.

The strength in Production and Order Backlogs may be driving
higher readings for Supplier Deliveries and Prices Paid as the pressure
of increasing demand drives both Supplier Deliveries well above the
decade average and Prices Paid to the highest level since July 2008 –
well above the average for the 2000-2010 decade.

Lead time reported for Production Materiel plummeted to near the
decades average while survey respondents identified resource
constraints as a significant factor contributing to month-to-month
variations in reported lead times. Meanwhile, lead times for Capital
Equipment lengthened and MRO Supplies neared Julys historic high.

The survey book for December 2010 capped a robust year with very
strong results. Conventional measures of economic activity describe a
generally sluggish recovery, clawing ever so slowly toward renewed
growth. However, the Chicago Report consistent with its nature as a
leading indicator characterizes an economy unfolding to reveal renewed
growth and prosperity.

** Market News International Chicago Bureau **

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