Chicago Business Barometer™ – Stabilizes at 52.2 in August

Key Points – August 2022 Report

The Chicago Business Barometer™, produced with MNI, all but stood still in August. The indicator inched up 0.1 points to 52.2, following the June/July slide which saw the Chicago Report™ fall to the lowest level since August 2020.

• The only sub-indicators to fall were employment and supplier deliveries, while prices paid was unchanged from the previous month. Supplier deliveries eased to the lowest level since July 2020 with just over a quarter of firms seeing deliveries slow.
• Production strengthened by 6.7 points to 54.9 in August, close to recovering July’s 7.0-point. Underpinned by more shipping days in August, orders saw robust production over the month.
• New Orders followed a similar trajectory, improving by 4.4 points to 48.9. Fourth quarter outlooks appeared positive. Long-time lead businesses continued to struggle and cited cancellations. • Order Backlogs grew by 6.1 points to 54.5 in August.
• Employment edged down 1.5 points to 54.6, implying little change in the tightness of the labor market.
• Supplier Deliveries declined 5.0 points to 62.1. Stockpiling in the first quarter of the year likely exasperated delivery issues.
• Inventories saw the largest rebound this month, bouncing back 13.9 points, reversing the July plunge. The index remains 7.5 points below May’s near 50-year high.
• Prices Paid held firm in August, all but unchanged at 81.8, with price pressures remaining acute.

SPECIAL QUESTION

This month we asked firms “Do you see the prospect of slowing global / U.S. growth impacting demand for your product?” Responses were significantly varied, over a third (34.9%) expected a downturn, the same as expecting unchanged demand. Meanwhile, 16.3% of respondents were already seeing a notable downturn.