• The Chicago Business Barometer plummeted to 36.3 in November, sharply missing the consensus forecast of 44.3 and signaling a rapid deterioration in business conditions.
  • The index has now remained below the 50-point expansion threshold for 24 consecutive months, indicating a prolonged period of regional economic contraction.
  • The steep decline raises concerns about the effectiveness of recent fiscal measures and points to broader manufacturing sector weakness.

Business activity in the Chicago region contracted at its fastest pace in months during November, with the Chicago Purchasing Managers' Index (PMI) falling sharply to 36.3. The reading was a stark miss against the 44.3 consensus and a steep drop from October's 43.8, according to data released Friday from ISM-Chicago.

The latest figure marks the 24th consecutive month the index has languished below 50, the threshold separating expansion from contraction. The persistent weakness underscores the challenges facing both manufacturing and non-manufacturing firms in the Midwest, even as the national economy shows pockets of resilience.

New orders and production saw significant declines, according to people familiar with the survey's details, pointing to weakening demand that could foreshadow a broader national slowdown. The national ISM Manufacturing PMI, also released this week, fell to 48.70, compounding concerns about the industrial sector's health.

Efforts to stimulate business investment through policy have so far failed to gain traction. The recent revival of 100% bonus depreciation has prompted some firms to reevaluate capital expenditure, but most remain cautious, citing uncertainty over the full financial and tax implications. A purchasing manager at a mid-sized industrial firm, who asked not to be named, said the policy "hasn't moved the needle on our investment plans given the current demand environment."

The Chicago PMI's sharp downturn contrasts with its performance in October, when it had briefly climbed above its 2025 average of 43.1. The reversal suggests that any nascent stabilization earlier in the fall has proven fragile. Market participants will be watching closely to see if this regional weakness spreads to other parts of the economy.

Correction: An earlier version of this article misstated the number of consecutive months the Chicago PMI has been below 50. The correct figure is 24 months.