Chicago Business Output Slips on Supply Shortage, Staffing Issues

Source: MNI

Chicago business output slipped to in August after hitting a two-month high the month prior, as supply and staffing constraints hit production.

• The Chicago Business Barometer fell to 66.8 in August, down from July’s 73.4. The reading remains above the 50 threshold that separates expansion from contraction.
• Firms attributed the decline to the ongoing lack of raw materials and hiring concerns amid the increase in new orders.
• Production slipped to a two-month low of 61, while new orders declined to 67.8.
• Order backlogs climbed to a record-high 81.6, given the issues on materials, freight inconsistencies, and staffing.
• Supplier deliveries hit a three-month high of 92.8. One respondent said delivery times were the worst in three years.
• Inventories jumped to a five-month high of 48.8 as firms stockpiled amid chain disruptions.
• Prices paid surged to a 42-year high of 93.9 due to more expensive production materials, while demand for labor grew slightly to 48.3.
• The majority of the firms expect the impact of the COVID-19 pandemic on the supply chain to peak in 2022.