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Chicago Purchasing Managers Index eased 0.7 points to 51.2 in August
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The Chicago Business BarometerTM, produced with MNI, slipped to 51.2 in August. This was the second straight reading above the 50-mark after having sat below it for a full year, as firms stated that business activity picked up further in August.
Among the five main indicators, Order Backlogs was the only category to show a monthly decline, while Supplier Deliveries recorded the largest gain.
Production improved further in August, increasing 1.4 points to the highest level since June 2019. Companies noted that previously pushed out orders led to an increase in production. Demand improved as well in August, with New Orders edging up to a one-year high. Anecdotal evidence suggests that the industrial and agricultural sector were hit the hardest and recovered only slowly, while the medical sector is faring very well.
The backlog of work cooled 1 point in August following a strong increase in the previous month. The indicator has been in contraction since August 2019.
Inventories fell 9 points in August, hitting the lowest level since March, indicating that companies continue to run down their stocks.
Employment ticked up 0.9 points but remains in contraction for a fourteenth straight month. Firms again noted staff reductions due to the Covid-19 crisis.
Supplier Deliveries rose 4.2 points after having eased for three consecutive months. Supplier Deliveries surged due to the pandemic, with delivery times peaking in April and only falling slowly since.
Prices paid at the factory gate decreased by 1.9 points in August after three consecutive months of gains.
This month’s special question asked: “When do you expect to get back to normal capacity?” The majority, at 55.6% forecast operating at full capacity in 2021 or later, while 26.7% are back at normal capacity already. Only 8.9% of respondents forecast to utilize their full capacity in Q3 2020 and Q4 2020, respectively.
Posted: August 31, 2020 Monday 09:45 AM