Chicago Business Barometer Jumps in June

Written by Sandy Williams

The Chicago Business Barometer hit its highest level since January, rising 1.4 points to 64.1 in June. Four of five components of the headline index strengthened in June, said MNI Indicators.

Orders flowed in for a five-month high and order backlogs were 11.4 percent higher than in June 2017. Supplier lead times continued to lengthen, resulting in somewhat lower production in June. Inventories diminished as firms faced difficulty replenishing stock, said manufacturers.

The prices paid indicator was at its highest level since May 2011 and at a seven-year high on a quarterly basis.

Employment levels increased for a second month in a row, but firms were less optimistic about future hiring. In a special survey question, 38.6 percent of participants said they had increased salaries to attract and retain employees.

About a quarter of participants said trade talks were having a significant impact on short-term purchasing decisions, while 39.2 percent said talks were impacting business but only minimally so far.

“Stronger outturns in May and June left the MNI Chicago Business Barometer broadly unchanged in Q2, running at a pace similar to that seen throughout 2017. While impressive, supply-side frustrations are undermining firms’ productive capacity,” said Jamie Satchi, economist at MNI Indicators. “Confusion surrounding the trade landscape continues to breed uncertainty among businesses and their suppliers and has led to many firms altering their immediate purchasing decisions,” he added.

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