The Chicago Business BarometerTM, produced with MNI, recovered to 60.3 in May, following last month’s dip to 56.4. Inventories saw a fresh near 50-year high.
All main indicators increased except for supplier deliveries, which hit the lowest since November 2020.
Production jumped 10 points in May, 0.4 points above the 12-month average. Firms cited China’s lockdowns causing material supply disruptions and a slowing of production; however, demand was very strong.
New Orders saw the second-largest increase this month, accelerating 8.6 points, edging closer to the March 2022 level, now sitting 3.3 points below the 12-month average. Close to a third of firms saw more orders this month compared to April.
Prices Paid came in 2.5 points higher at 88.6 with over three-quarters of firms inferring higher prices. Raw material, labor and shipping costs were acute. Some firms did see prices easing in certain commodities.
Employment ticked up by 0.6 points to 46.1. Recruiting for production and distribution remained difficult.
BACKLOGS
Order Backlogs inched up 1.2 points to a 7-month high 64.6. Responses were varied, some stating mismatches between production capacity and increased new orders.
Supplier Deliveries dipped again, down 5.2 points to 69.3. This was the lowest since November 2020 as deliveries remained slow and lead times lengthened. Firms cited lockdowns in China as a key culprit.
Inventories rose 4.5 points to 69.1, a near 50-year high, as firms again expanded their inventories to buffer for further supply disruptions and shortages.
The survey ran from May 2 to 17.