Supplier Deliveries Continues to Lead Index

While the reading is down from the highest readings recorded during the first quarter, the GBI indicated faster growth in September than during even the fastest growing months of 2017.

The Gardner Business Index (GBI) ended September at 56.9, moving only slightly lower from the prior month. While the reading is down from the highest readings recorded during the first quarter, the Index indicated faster growth in September than during even the fastest growing months of 2017. For the month, the Index is up 2.5 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 exports reading for September fell nearly two points during the month, indicating greater contraction in exports.

For five consecutive months now, supplier deliveries has been the fastest growing component of the Index, generally followed by production. The Gardner Intelligence team has been strongly encouraged by the re-acceleration in new orders since July, as  changes in new orders growth act as a bellwether for future changes in production and backlog, both of which have also improved since July.

Acceleration in new orders and backlogs has come despite a deteriorating situation for exports. While Gardner does not specifically collect data on trade by product type, recent trade-related events have increased the cost of some U.S. exports abroad, which may be hurting export flows and thus contributing to the export contraction that Gardner is observing. The last time Gardner’s export reading was at its latest level was in January of 2017.

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

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