The Chicago Business Barometer decreased by 6.0 points to 56.7 in June.
New orders fell by 11.7 points and production decreased by 10.4 points from May. Both indices remain in expansion territory despite slipping from the month prior, according to the latest report from Market News International (MNI) and the Institute for Supply Management (ISM).
The Barometer is a diffusion index. Readings above 50 indicate improving business conditions. Those below 50 indicate contraction.
Increases in supplier deliveries, order backlogs and employment indicators offset the decreases.
Respondents didn’t feel confident predicting recovery timing for the global supply chain upon reaching a resolution with Iran. Most of those surveyed (41%) said they didn’t know or were unable to answer at the time. A quarter of respondents (25%) believe recovery will take 7-12 months. Nineteen percent said recovery will occur within 3-6 months. An optimistic 13% expect full recovery to take two months or less. The remaining 3% responded “other.”
Respondents engaged in international business reported actively filing and managing tariff refund claims through established processes (27%). An equal number of respondents (27%) remain in the preparation phase of tariff refunding. This stage entails gathering documentation and assessing eligibility requirements. Another 20% continue to evaluate the feasibility of receiving a tariff refund. The remaining 26% of respondents are not eligible for refunds or say the refunds do not apply to their businesses (13%), aren’t pursuing a refund (10%), or other (3%).
If an organization receives its tariff refund, 50% of respondents currently have no plans for the funds or are evaluating potential plans, while 23% intend to improve working capital or improve liquidity. The third largest group of respondents (20%) will use the refund to offset pricing pressures and stabilize customer pricing. Reinvesting into supply chain resilience and sourcing diversification will be the focus for 7% of respondents who receive a refund. Respondents who plan to use the refund for investment or strategic growth initiatives totaled 7%. The remaining 3% responded “other.”
MNI ran the monthly survey from June 1 to the 15.
