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Economy in Brief

U.S. Chicago Business Barometer Retreats in June
by Tom Moeller  June 30, 2021

• Barometer falls to lowest level in four months.

• New orders & production weaken.

• Delivery speeds slow while pricing power strengthens.

The ISM-Chicago Purchasing Managers Business Barometer declined to 66.1 in June from 75.2 in May. The Action Economics Forecast expected a lesser decline to 70.0. An index above 50 suggests growing business activity in the Chicago area.

Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure weakened to 58.9 following three straight months at 64.9. The figure remained up, nevertheless, from the recession low of 40.7 last May.

The new orders index declined to 66.7, the lowest level in three months. The production series also fell to 60.0, down from the April high of 72.9 as a lessened 35% (NSA) of respondents reported a higher level of output and an increased 15% reported a decline. The order backlog series weakened to 66.6 from the record 80.7 in May. The inventory index declined moderately. Posting another decline was the employment reading to 44.0, indicating a net contraction in payrolls for the second month since February. Supplier delivery speeds slowed significantly this month as indicated by a rise in the index to 86.5. A strengthened 75% (NSA) of respondents reported slower delivery speeds while a lessened three percent reported quicker speeds.

Prices paid strengthened to 91.9, the highest level since December 1979. A higher 86% (NSA) of respondents reported paying higher prices while none paid less.

The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey is collected online each month from manufacturing and non-manufacturing firms in the Chicago area. Summary data are contained in Haver's USECON database with detail including the ISM-style index in the SURVEYS database.

Chicago Purchasing Managers Index (%, SA) Jun May Apr Jun '20 2020 2019 2018
General Business Barometer 66.1 75.2 72.1 37.3 49.0 51.4 62.4
ISM-Adjusted General Business Barometer 58.9 64.9 64.9 40.7 49.6 51.5 60.8
   Production 60.0 70.6 72.9 34.2 47.9 51.3 64.6
   New Orders 66.7 80.0 72.2 30.0 47.1 52.0 63.8
   Order Backlogs 66.6 80.7 73.2 31.9 42.6 46.9 58.0
   Inventories 37.5 41.8 46.8 39.2 44.7 48.7 55.4
   Employment 44.0 49.8 56.4 32.6 41.8 49.6 55.2
   Supplier Deliveries 86.5 82.3 76.4 67.3 66.4 55.6 64.8
   Prices Paid 91.9 88.4 91.5 55.7 59.5 58.5 74.0
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