MNI 5 Things: MNI Chicago PMI Finishes Q2 in Robust Fashion

     LONDON (MNI) - The following are the key points from the June MNI Chicago

Business Barometer:

     - The MNI Chicago Business Barometer rose for the third straight month in

June, rising by 1.4 points, to finish the quarter at a five-month high of 64.1

-- the best outturn for a month of June since 1994. On the quarter, the

Barometer averaged in at 61.5, broadly unchanged from Q1, upholding the strong

pace of business activity seen for much of last year.

     - Having increased for only the first time this year in May, order book

growth made it two in a row in June, assisting the Barometer's uptick. The New

Orders indicator picked up to a level last seen higher in January but was offset

by a slight easing in output. Together, New Orders and Production account for

the lion's share of the headline index -- 60% exactly.

     - Supply-side constraints continued to affect firms and their operations.

Supplier Deliveries rose further in June, to the highest level since November,

with the associated disruption inducing a slowdown across production lines.

Reflecting this, the Supplier Deliveries indicator's three-month average in June

was consistent with the highest calendar quarter outturn in 14 years. Longer

lead times, alongside higher demand, also explained the month's rise in backlogs

- up to an eight-month high.

     - A contributory factor to the longer waits for key materials remains

expensive materials. Prices have remained stubbornly dear for a long stretch of

time and in June the Prices Paid indicator headed further north to a seven-year

high. Many firms believe suppliers are using ongoing trade discussions to ramp

up prices and, as purported by the first of two special questions this month,

just under two thirds of firms said the discussions had caused business to alter

immediate purchasing decisions to some degree.

     The other special question this month asked firms if they had increased

basic salary packages to attract and secure prospective talent. While the

majority said no, a chunky 38.6% said that this was a something they had turned

to. Previous month's surveys have highlighted a long running struggle to find

and secure skilled, suitable workers

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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