**MNI 5 Things: MNI Chicago PMI Picks Up A Gear in May

By Jamie Satchithanantham

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

Business Barometer:

     - The MNI Chicago Business Barometer built on April's marginal 0.2-point

rise with a more substantial 5.1-point increase in May, the two sole rises this

year. Climbing to 62.7, the Barometer was up 5.7% year-over-year, returning to

the black after April saw the first y/y fall in 15 months. 

     - Instrumental to the Barometer's bounce back was the year's first increase

in order book growth. Since peaking in December, the pace of growth of New

Orders had only drifted south until this month. The indicator now stands 2.1%

above where it was last May and suggests the revival in Production, up for the

second straight month, should extend further yet.      

     - Part of the Barometer's rise, however, was due to the intensification of

supply-side constraints, concentrated specifically through the supplier lead

times channel. Although only up a modest 0.4-points in May, the Supplier

Deliveries indicator was 12.4% higher versus May 2017 and, like Prices Paid,

consistent with a range last seen higher some seven years ago.      

     - Driving the elevated levels of input prices and lengthy lead times was a

scant availability of key input materials. Time taken to source Production

Materiel rose by a punchy 15.3 days in May, taking overall lead times on key

materials to their highest level since August 2014.          

     - Just over two thirds of businesses said that supply side issues were

negatively affecting operations, one of two special monthly questions

highlighted. Some firms, frustrated at elevated lead times, said they would look

to find new suppliers, as far afield as China, having grown tired of the longer

delivery times and elevated prices. Others put the longer lead times down to

suppliers' lack of staff and insufficient levels of stock.       

--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

[TOPICS: MAUDR$,MAUDS$,M$U$$$]