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Chicago Purchasing Managers Index rose 15.3 points to 51.9 in July
The Chicago Business BarometerTM, produced with MNI, rose to 51.9 in July, the highest level since May 2019. Business activity recovered following twelve consecutive months of readings below 50. Nevertheless, companies noted continued uncertainty amid the ongoing Covid-19 crisis.
Among the main five main indicators, New Orders and Production saw the largest monthly gains, while Supplier Deliveries eased.
Demand increased in July, recovering from the sharp pandemic hit. New Orders jumped 23.8 points to the highest level since August 2019. Production strengthened, rising 49.5%, putting the index back into expansion. While some companies noted recovering orders, others reported continued difficulties due to the Covid-19 effects.
Order Backlogs grew 15.3 points in July, marking a near one-year high. However, the index remains in contraction, where it’s been since September 2019.
Inventories gained 6.9 points in July after falling sharply in the previous month.
Even though Employment ticked up 26.0%, there was anecdotal evidence that firms had to lay off staff as a result of the current health crisis. However, others mentioned difficulties in finding new staff.
Supplier Deliveries cooled in July, falling 6.4 points to the lowest reading since January 2020.
Prices paid at the factory gate edged higher, gaining 1.7 points, posting a seven-month high.
This month’s special question asked: “Have you updated your contingency plans to control a potential second wave in the future?” The majority, a 51.3%, have planned ahead, while 30.2% have no contingency plans in place. The second question asked: “What is your planned business activity forecast for balance of 2020, by percent?” The majority of 65% of respondents expect growth to be below 5% in 2020.
Posted: July 31, 2020 Friday 09:45 AM