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MNI Chicago Business Barometer™ – Rose To 73.4 In July

Date 30/07/2021

Key Points – July Report

The Chicago Business BarometerTM, produced with MNI, jumped to 73.4 in July, both a two-month high and the second highest pandemic-era reading. Demand is strong but firms remain concerned about supply chain disruptions and rising prices.

Among the main five indicators, Production saw the largest increase, followed by New Orders, while Supplier Deliveries remained unchanged.

Production saw the biggest gain in July, up 8.8 points, as demand remained high and some firms benefited from supply chain issues. The index now stands at a two-month high. New Orders increased 5.4 points, signalling strong demand.

Order Backlogs advanced 3.4 points, also hitting a two month high. Companies noted a lack of raw materials and warehouse personnel, leading to an increased backlog of work.

Inventories gained 5.1 points in July, although it has been in contraction since April.

Demand for labor increased 3.4 points in July. Anecdotal evidence showed that firms planned to hire new employees, but staff availability remains subdued.

Supplier Deliveries remained at June’s level in July, still at the highest level since March 1974. Delivery delays and a lack of workforce availability remained a problem, firms noted.

Prices paid at the factory gate eased slightly, down 0.3 points but remained at a historically high level. Higher prices for materials and freight were again a major concern for survey respondents.

This month’s first special question asked, “What is your planned business activity growth forecast for the second half of 2021?” The majority (48.8%) expect growth to be between 5% and 10%. The second question asked, “Is your company looking at the current inflationary pressures as transitory; in agreement with the Fed?”. The majority (37.2%) was unsure.