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Economy in Brief

U.S. Chicago Business Barometer Rebounds in July
by Tom Moeller  July 30, 2021

• Barometer continues to trend higher.

• Production surges. Orders and employment improve.

• Delivery speeds remain slow while pricing power is strong.

The ISM-Chicago Purchasing Managers Business Barometer increased to 73.4 in July after falling to 66.1 in June. The Action Economics Forecast expected a decline to 65.0. 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 rose to 63.5 and recovered most of its June decline to 58.9.

The production series jumped to 68.8 after falling sharply in June. An increased 54% (NSA) of respondents reported a higher level of output and a lessened 9% reported a decline. The new orders measure rose modestly to 72.2 after falling to 66.7 in June. The order backlog series moved higher to 70.0 after falling sharply in June to 66.6 from the record 80.7 in May. The inventory index rose moderately to 42.6 but remained well below its March high of 55.6. The employment reading rose to 47.5 and recovered just a small piece of its June fall. It indicated a net contraction in payrolls for the third straight month. Supplier delivery speeds remained slow this month as indicated by a steady index at 86.5. A fairly steady 74% (NSA) of respondents reported slower delivery speeds while none reported quicker speeds, down from 10% three months ago.

Prices paid eased to 91.6 from 91.9 but remained near the highest level since December 1979. An elevated 82% (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) Jul Jun May Jul '20 2020 2019 2018
General Business Barometer 73.4 66.1 75.2 53.0 49.0 51.4 62.4
ISM-Adjusted General Business Barometer 63.5 58.9 64.9 50.0 49.6 51.5 60.8
   Production 68.8 60.0 70.6 48.9 47.9 51.3 64.6
   New Orders 72.2 66.7 80.0 53.9 47.1 52.0 63.8
   Order Backlogs 70.0 66.6 80.7 47.1 42.6 46.9 58.0
   Inventories 42.6 37.5 41.8 46.5 44.7 48.7 55.4
   Employment 47.5 44.0 49.8 40.4 41.8 49.6 55.2
   Supplier Deliveries 86.5 86.5 82.3 60.3 66.4 55.6 64.8
   Prices Paid 91.6 91.9 88.4 57.4 59.5 58.5 74.0
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