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The Chicago Business Barometer™, produced with MNI, fell to 66.8 in August, the lowest reading since June after climbing to a two-month high in July
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Key Points – August 2021 Report
The Chicago Business Barometer™, produced with MNI, fell to 66.8 in August, the lowest reading sinceJune after climbing to a two-month high in July. Orderbacklogs rose sharply while production sank. Firms saythe available supply of raw materials and workers isn'tsufficient to keep up with new orders.
Among the five main indicators, Order Backlogs saw the largest increase. That was followed by Supplier Deliveries, while Production saw the largest decline.
Order Backlogs climbed 11.6 points to 81.6, the highest reading since 1951, as firms reported a shortage of materials, freight inconsistencies, and insufficient staff.
Supplier Deliveries shot up 6.3 points to a three-month high of 92.8, with one survey respondent reporting the worst delivery times in three years.
Inventories rose 6.2 points to 48.8, the highest since March though still signaling contraction. Some firms reported stockpiling to get ahead of further supply chain disruptions, while others said their inventories were dwindling because of logistics issues.
Prices Paid increased 2.3 points to 93.9, hitting the highest level since 1979 as companies continued to report higher costs for production materials.
Demand for labor rose only slightly in August, with the Employment index increasing 0.8 points to 48.3 as firms struggled to find qualified workers for available jobs.
Production fell sharply in August, dropping 7.8 points to a two-month low of 61. New Orders fell 4.4 points to 67.8, suggesting demand is growing at a slower pace compared to July.
This month's special question asked, "When do you expect the supply chain impact of COVID-19 to peak?" The majority (37.8%) expect it to peak in 2022. The second question asked, "With enhanced Unemployment Insurance benefits set to expire in September, are you forecasting an increase in your staffing levels?" The majority said they were not.
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