Chicago Business Activity Contracted Again in July

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Chicago business activity has contracted in July

Manufacturing activity in the Chicago area continued to soften in July but at a slower rate than previously, data from a survey compiled by MNI Indicators showed Monday.

The Chicago Business Barometer rose to 42.8 in July from 41.5 in June, falling short of the 43.3 reading expected by economists polled by The Wall Street Journal but marking the second consecutive month that the pace of contraction relaxed. The barometer is compiled through surveys of firms in the Chicago area in order to assess business conditions, and comprises components including new orders, order backlogs, production, supplier deliveries and employment. A reading below 50 suggests a contraction in activity, and all subindexes remained in negative territory, with the exception of prices paid, the report said.

New orders boosted the uptick from the previous month, rising 3.4 points. The production index also continued to improve in July after a rebound in June, and order backlogs also improved, the report said. The higher readings were largely due to fewer negative responses rather than more positive ones, MNI said.

The employment index meanwhile slipped nearly six points, marking one of the lowest points this year. Supplier deliveries also fell to their lowest level since 2009, suggesting an easing of previously tight supply chains but also reflecting general economic weakness, the report said.Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

 

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