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The Chicago Business BarometerTM, produced with MNI, declined to a more than two-year low in September. The indicator tumbled by 6.5 points to 45.7, entering contraction territory for the first time since June 2020.
- All main indicators fell in September, with production, new orders, order backlogs, employment and supplier deliveries all weakening to Summer 2020 lows. The largest declines were recorded in employment, order backlogs and production sub-indices.
- Production slumped by 10.4 points to 44.5 in September, giving back all the recovery (and more) from August. Continued supply-chain issues alongside slowing new orders contributed to lower production for the month, experienced by over a quarter of respondents.
- New Orders contracted for the fourth consecutive month, slipping by 6.7 points to 42.2. Softening demand was cited.
- Order Backlogs slowed 12.6 points to 41.9 as weak new orders saw production shift to working through remaining orders.
- Employment recorded the starkest decline in September, dropping 14.4 points to 40.2 in September and re-entering contractive territory.
- Supplier Deliveries moderated by a further 2.3 points to 59.8. This was the lowest since July 2020 as deliveries remained unstable and lead times long.
- nventories weakened by 8.6 points to 53.0, over five points below the 12-month average. Inventories remain very high, as firms cite having overstocked previously due to supplies issues. As demand for materials slows alongside lower sales projections, suppliers are requesting orders to maintain relationship.
- Prices Paid softened in September by 7.7 points to 74.1. Price Paid was the lowest since November 2020 and signals a more substantial slowing of prices charged related to an early sign of contracting demand in specific products
This month we asked firms whether they were considering new hires into the second half of the year. Around 41% were, however half of these were looking to hire less than originally planned. A total 33.3% were holding off on new hires. A minority of 2.6% anticipated severances, while 23.1% remained unsure of employment plans for H2.
