GBI: 2018 May Be Fastest-Expanding Year in Recorded History

The Index was driven higher by supplier deliveries, production and new orders.

The Gardner Business Index (GBI) closed October slightly lower than the month prior at 55.7. In the year-to-date period, the index has averaged 57.6, keeping 2018 on track to be the fastest expanding year in recorded history, breaking the record 2017 currently holds at 55.3. For the month, the index is down 1.1 percent compared to the same month one year ago. 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 employment, backlog and exports. The rate at which exports eroded during October quickened, resulting in the lowest reading since the fourth quarter of 2016.

In general, the trends in October mirror those reported in recent months.  The  reading of supplier deliveries continues to register as the fastest growing component among all other index components.  Prior to the current economic cycle, the highest reading ever recorded for supplier deliveries was 59.3 in early 2012.  However, since February of this year, supplier deliveries have registered an uninterrupted chain of readings above that 2012 high.  The readings for all components less exports during October were within their range of recorded values over the last six-months.  Recent volatility among the business index components may be a result of industries seeking to position themselves in preparation for – or as a result of – international tariffs which in total are affecting hundreds of billions of dollars in internationally traded good.

The reason for the contraction in exports requires more careful analysis.  In recent months currency markets have experienced a significant depreciation of the Chinese Yuan against the U.S. dollar, meaning that U.S. goods sold there are now 9-percent more expensive when only accounting for fluctuating exchange rates.  This currency exchange impact combined with 25-percent Chinese tariffs on $16 billion in U.S. exports starting in August means that U.S. exports have actually experienced not one, but two significant headwinds in just the last few months with a total net effect of roughly a 34 percent price increase for U.S. exports to China. 

The fastest growing industries during the month were power generation, oil & gas, primary metals, plastics/rubber products, industrial motors/hydraulic/mechanical components, aerospace, petrol processors, medical, pumps/valves/plumbing products, metalcutting job shops, machinery/equipment, custom processors, automotive, forming/fabricating (non-auto) and  electronics/computers/telecommunications.  All other 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. It also conducts the Capital Spending Survey and World Machine Tool Survey.


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.