GBI Indicates Slowing, Still Strong Growth

While the latest readings are lower than at any other time during the current business upcycle, these values would have been considered encouraging during past upcycle.

The Gardner Business Index (GBI) closed November at a recent historical nadir of 53.4. This latest figure lowers the year-to-date average to 57.3, which is still better than the record high annual average reading of 55.3 set last year. The latest reading is down 2.4 percent compared to the same month one-year ago. Gardner Intelligence’s review of the underlying data for the month indicates that the averages-based Index was supported by supplier deliveries, production and new orders. The components which lowered the index included employment, backlog and exports.

All components of the index indicated slowing growth in November with the exception of exports, which have been contracting since August. Production and new orders both expanded at their slowest pace since the fourth quarter of 2016. While the latest readings are lower than at any other time during the current business upcycle, these values would have been considered encouraging during past upcycle periods such as 2011-2012 and 2014-2015. This is a testament to the magnitude of this business cycle. 

November’s contractionary backlog reading marks the end of the longest period of sustained backlog expansion in the history of the Business Index. The 23-month record far exceeds the prior records sent in 2012 and 2014. The contraction in backlogs alone should not be necessarily considered a bellwether of future business conditions. Considered in the context of the other business index components, both supplier deliveries and production in 2018 set all-time high expansionary readings in the first quarter of the year. Supplier deliveries – a critical factor to production expansion – has recorded 10 consecutive months of readings above 60 through November. In contrast, the highest supplier delivery reading prior to 2018 was set in 2012 with a reading under 60. This combination of strongly expanding supply chain and production activity even during what would be historically considered respectable new orders growth has understandably led to an inflection point at which backlogs are experiencing a natural contraction.

The fastest growing industries during the month were aerospace, plastics/rubber products, industrial motors/hydraulic/mechanical components, primary metals, petrol processors, custom processors, machinery/equipment, construction machinery, electronics/computers/telecommunications, metalcutting job shops, automotive, pumps/valves/plumbing products, medical and power generation. 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, Moldmaking, was the fastest growing technology; it was followed by Composites, Metalworking, Precision Machining, Plastics and Finishing. All technologies expanded during the month.


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