A report released by MNI Indicators on Thursday showed Chicago-area business activity unexpectedly contracted at an accelerated rate in the month of March.

MNI Indicators said its Chicago business barometer fell to 41.4 in March from 44.0 in February, with a reading below 50 indicating contraction. Economists had expected the index to rise to 46.0.

The Chicago business barometer decreased for the fourth consecutive month, falling to its lowest level since May 2023.

The continued decline by the business barometer partly reflected a notable reduction in order backlogs, as the order backlogs plunged by 11.4 points to its third lowest level of the past 15 years.

The new orders index also fell by 3.4 points to the lowest level since September 2023, while the supplier deliveries index dipped by 1.6 points to the lowest level since October 2023.

Meanwhile, MNI Indicators said a gain in employment helped limited the downside, with the employment index rebounding by 6.4 points.

The report also said the prices paid index slid by 2.1 points to the lowest since November 2023 due to organizations being proactive on costs.