Index Rebounds in August

The Gardner Business Index ended August at 57.1, moving higher from the prior month and breaking a five-month string of flat or lower readings coming off the Index’s all-time high of 60.1 recorded in February.

The Gardner Business Index (GBI) ended August at 57.1, moving higher from the prior month and breaking a five-month string of flat or slowing growth coming off the index’s all-time high of 60.1, recorded in February. August’s reading puts the index back above the highest readings reached during the last two cycle peaks of 2012 and 2014. Compared to the same month one year ago, the index is up 4.1 percent. Gardner Intelligence’s review of the underlying data for the month indicates that the Index was driven higher by supplier deliveries, production and new orders. The components which lowered the index’s average-based calculation included backlogs, and exports. The exports reading for August registered just slightly below 50, indicating a very slight contraction in exports.

Supplier deliveries continues to be the fastest growing component among the six elements which form the total index, with a year-to-date average reading of 61.9. Moreover, the significant expansionary growth in new orders, production, employment and backlogs is an encouraging sign of long-term growth. Experiencing accelerating growth across multiple business indicators – as opposed to only a few growing indicators – gives greater confidence in the direction and durability of the manufacturing business environment.

The August backlog reading indicated that manufacturers experienced accelerating backlog growth well above the 2017 average reading. Concluding with this latest reading, backlogs have now experienced 16 consecutive months of expansion. By comparison, from the beginning of recordkeeping in late 2011 through the end of 2016  backlogs had never recorded more than 3 months of consecutive expansion. As backlogs continue to grow, manufacturers should be able to confidently expand operations and smooth their production levels during periods of new order volatility.

The fastest growing industries during the month were oil & gas, industrial motors/hydraulic/mechanical components, electronics/computers/telecommunications, construction machinery, aerospace, medical,

primary metals, plastics/rubber products, pumps/valves/plumbing products, power generation, machinery/equipment, metalcutting job shops, forming/fabricating (non-auto), petrol processors, custom processors, automotive and hardware. No industries tracked by Gardner Intelligence contracted during the month.

 

In addition to the overall durable goods index, Gardner Intelligence computes indices for several technologies or processes. For the month, Metalworking was the fastest growing technology. It was followed by Composites, Precision Machining, Finishing, Plastics and Moldmaking. All technologies expanded during the month.

Reports

Top Shops

‘Top Shops’ is a benchmarking and recognition program designed to help shops build their business.

World Machine Tool Survey

An independent annual survey that collects statistics from machine tool consuming and producing countries and compares them in real U.S. dollars.

Capital Spending Survey

An annual survey that collects statistics regarding budgeted spending on machine tools, testing equipment, software and more.

Gardner Business Index

A diffusion index measuring month-to-month changes in activity at durable goods and discrete parts manufacturing facilities.