• The rise is disappointing.

• Component increases are broad-based.

The Chicago Purchasing Managers Business Barometer improved to 36.6 during June from 32.3 in May. Despite the increase, the figure remained below its high of 66.5 in July 2018. A reading below 50 suggests contracting activity in the Chicago area. The Action Economics Forecast Survey expected a reading of 42.0.

Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with similar methodology to the ISM Composite Index. This measure eased to 40.2 in June, the lowest reading since July 2009. During the last dozen years, there has been a 59% correlation between the Chicago ISM-Adjusted index and q/q growth in real GDP.

The production, new orders and order backlogs series posted large m/m increases. A fairly steady 18% (NSA) of respondents reported higher orders and a greatly reduced 57% reported declines. These increases were accompanied by declines in inventories reading and in the supplier delivery index, suggesting quicker product delivery speeds.

The employment index declined to 31.9, the lowest level since June 2009. It remained down from a recent peak of 59.1 in January 2018. Just two percent of survey respondents reported a rise in hiring while 35% reported a decline.

The index of prices paid rose to 55.2 from 53.8, indicating a rise in pricing power. A steady 26% of respondents reported higher prices but a lessened 13% reported a decline.

The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey covers a sample of over 200 purchasing professionals in the Chicago area with a monthly response rate of about 50%. Summary data are contained in Haver's USECON database, with detail including the ISM-style index in the SURVEYS database. The Action Economics Forecast Survey is available in AS1REPNA.