Chicago Business Barometer Tumbles 3.9-points to the lowest level since August 2020.
The Chicago Business BarometerTM, produced with MNI, slid further in July, extending June’s decline. The indicator fell 3.9-points to 52.1, the lowest level since August 2020.
All main indicators decreased except for prices paid and employment, the latter of which hit the highest level since October 2021. Production, New Orders, Order Backlogs and Supplier Deliveries are all back around 2020 levels.
PRODUCTION SLOWS TO A TWO-YEAR LOW
Production fell 7.0 points to 48.2 in July, a two-year low. Close to a fifth of firms saw lower production.
New Orders slid a further 5.4 points to 44.5, the lowest in 25 months. Overall demand waned in July.
Order Backlogs slumped 6.8 points in July to 48.4. As new order levels softened, a quarter of businesses saw backlogs decline as they worked through postponed production.
Employment grew 5.4 points to a current year high of 56.1 as the labor market continued to tighten. As the propensity to purchase large ticket items falls, employment plans are being revised. Small companies continue to struggle with staff retention and higher salary demands.
EASING PRICES AT THE FUEL PUMP CREATES LITTLE RELIEF
Prices Paid rose 2.3 points to 81.9 as price pressures intensified. Transparency issues regarding grounds for supplier price increases were flagged. Despite easing commodity prices, suppliers are unwilling to lower charging costs in fear of lower prices being temporary.
Supplier Deliveries ticked down 2.0 points to 67.1. This was the lowest since October 2020 as deliveries remained slow and lead times lengthened. Both the war in Ukraine and knock-on effects of Chinese lockdowns continued to hamper supply chains.
Inventories saw the largest decrease this month, plunging 16.2 points. This is a stark difference to May’s near 50-year high.
The survey ran from July 1 to 19