March GBI: 58.9

The Gardner Business Index (GBI) fell slightly from February’s high, yet at 58.9 for March, the Index was far higher than the average reading of recent months and years.

The Gardner Business Index (GBI) fell slightly from February’s high, yet at 58.9 for March, the Index was far higher than the average reading of recent months and years. Compared to the same month one year ago, the index is up 4.3 percent.  Gardner Intelligence’s review of the underlying data for the month concludes that the Index was driven higher by production, new orders, and supplier deliveries.  Compared to February’s readings, growth of production and new orders was slightly lower while supplier deliveries expansion increased. The components which lowered the index’s average-based calculation included backlog, employment, and exports.  No component of the overall index contracted during the month.

March’s reading of production, new orders and backlog were slightly lower when compared to the prior month, yet all measures continue to be well above historical norms.  The gap between new orders and production opened slightly in March as growth in production exceeded growth in new orders.  In recent months, production and new orders readings have exhibited minimal difference.

Gardner attributes the month’s lower backlog reading to the relatively faster growth of production over new orders as well as the improvement in supplier deliveries.  The March 2018 backlog reading finished 6.8 percent higher from the same month one year ago.  This change would have been greater had the March 2017 reading not been unusually strong as compared to the other backlog readings from early 2017.  Analyzing backlog data on a quarterly basis indicates that 1Q2018 readings are 10.2 percent higher as compared to the same quarter one year ago.

Employment readings finished the first quarter of 2018 marginally higher as compared to fourth quarter 2017 results.  The manufacturing employment picture has not significantly changed since February of 2017, the first month during which labor demand signaled a significant shift.  Labor shortages continue to be a persistent problem for virtually all manufacturers.  The average employment reading during all of 2017 at 55.8 is only modestly lower than the first quarter 2018 average of 56.7. 

The fastest growing industries were aerospace, hardware, industrial motors/hydraulic/mechanical components, primary metals, forming/fabricating (non-auto), pumps/valves/plumbing products, medical, electronics/computers/telecommunications, metalcutting job shops, machinery/equipment, construction machinery,  plastics/rubber products, and automotive.  All other industries contracted.

In addition to the overall durable goods index, we compute indices for several technologies or processes. In March, Finishing was the fastest growing technology. It was followed by Composites, Metalworking, Moldmaking, Production Machining, and Plastics.  All technologies expanded during the month.


Top Shops

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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.