MNI Indicators - MNI Chicago Business Barometer: June 2023 - Chicago Business Barometer™ Edges Up To 41.5 In June

June Chicago Report™ Signals a Less Stark Contraction in Production

• The Chicago Business BarometerTM, produced with MNI, ticked up by 1.1 points to 41.5 in June, largely due to a less stark contraction in Production. The barometer remains firmly sub-50, signaling ten consecutive months of contractionary business activity in June. 
• Production and Order Backlogs inched up in June, whilst all other subindexes weakened. Prices Paid and Inventories recorded the biggest falls. All subindexes excluding Prices Paid were in contractive (sub-50) territory this month. 
• Production improved by +3.0 points to 42.6 in June, having experienced a tumultuous few months and a marked 8.3 point May decline. 
• The New Orders index was broadly unchanged, softening by -0.1 points to the lowest since November 2022. 
• Order Backlogs gained +2.7 points, albeit failing to reverse the marked May slide to the lowest level since May 2020. With demand weakness prevailing, the index signals firms have been working down backlogs over the last six months. 
• Employment slipped -2.9 points in June, weakening to 45.6. Barring an April uptick, the Employment indicator has been contractive since September 2022. Recruiting and retention of staff continue to be challenging. 
• Supplier Deliveries dipped by -3.3 points as delivery times moderated. This was the lowest since March 2016.
• Inventories declined by -6.1 points in June to the lowest reading since August 2020 as firms wound down stocks in aggregate. Some firms had built up inventory due to concerns regarding West Coast port strikes.
•  Prices Paid decelerated by -7.4 points to 53.5, the lowest since April 2020. Only 29.2% of firms reported higher prices paid in June, the lowest since October 2020 and substantially lower than the peak of 86.1% experienced in June 2021.

In June, the Chicago SurveyTM asked firms “In light of the recent talk of recession towards the end of the year, are you considering slowing hiring in upcoming months?”. A combined 41.7% were expecting to do so (equally split between responding yes and somewhat). 29.2% were not intending to slow hires, and a further 29.2% were unsure