MNI DATA IMPACT: June Chicago Biz Barometer At 3-Month High

-- Chicago Business Barometer 36.6 in June vs 32.3 in May

-- Q2 Chicago Business Barometer At 34.8; Lowest Since Q1 2009 

By Irene Prihoda

     LONDON (MNI) - The Chicago Business Barometer edged up slightly in June

with business activity picking up as Covid-19 related shutdowns eased somewhat,

although falling short of market expectations of a stronger uptick.

     Among the main five indicators, Production and New Orders saw the largest

monthly gains, while Supplier Deliveries and Employment faltered.

     The main points of note from the release follow:

     -The headline index rose 4.3 points to 36.6 in June, hitting the highest

level since March. The index remained below 40 for a third consecutive months

which was last seen during global financial crisis. Across Q2, business

sentiment slipped 11.8 points to 34.8, the lowest level since Q1 2009.

     -Production saw the biggest sector jump in June, rising by 10.1 points to

33.8. However, the quarterly index dropped to a series low of 27.6 in Q2. Demand

strengthened to 29.3 in June, while the quarterly figure fell to the lowest

level in 40 years. In Q2, New Orders revealed the largest q/q fall, sinking 20.1

points to 25.1.

     -Order Backlogs gained 5 points in June, shifting the index to a two-month

high of 31.9. On a quarterly basis, the indicator declined to an 11-year low

32.0.

     -Inventories dropped by 24.7% to 39.4 in June after rising above 50 in May

for the first time in 10 months.

     -Employment eased 5.1 points to 31.9 in June, marking the twelfth

consecutive sub-50 reading. The index also fell on a quarterly basis, slipping

to 34.2, its lowest level since the global financial crisis.

     -Supplier Deliveries recorded the second decline in a row, as firms

continued to mention Covid-19 related delays. Although the indicator cooled to

66.7 in June, it jumped to 73.3 in Q2, its highest level since Q1 1979.

     -Prices paid at the factory gate rose to 55.2 in June, while they dropped

on a quarterly basis by 2.7 points to 52.5. Many companies noted the elevated

cost for air freight from Asia.

     -This month's special question asked: "What are your personnel plans for

the rest of the year?". The majority (55.8%) plan a hiring freeze, while 23.3%

expect to lay off employees. Only 18.6% of respondents projected expanding their

workforce.

     The survey ran from June 1 to 15.

--MNI London Bureau; +44 0203 865 3814; email: irene.prihoda@marketnews.com

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

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