Gardner Intelligence Blog

Housing Permits Grow Nearly 12% in June

Housing Permits Grow Nearly 12% in June

There were 124,000 housing permits filed in June 2020. Permits filed in June were up 11.7% compared with one year ago, returning to double-digit growth after two months of contraction. The growth is likely a result of people moving from cities to suburbs as a result of the pandemic. In June, the annual rate of growth accelerated to 6.2%, which made it the 10th-straight month of growth. It was the second-fastest rate of annual growth since July 2018.

The real 10-year Treasury rate, which is the nominal rate minus the rate of inflation, was -0.84%. This was the sixth consecutive month and ninth of the last 11 that the real rate was negative. Inflation was relatively low from April to June compared with the previous four years. However, inflation did pick up significantly in June.

Capacity Utilization Improves for Second Month

Capacity Utilization Improves for Second Month

In June, durable goods capacity utilization was 64.3%, which was the second month in a row the rate of capacity utilization moved higher. Compared with one year ago, capacity utilization contracted 15.1%, which was the second straight month that the month-over-month rate of change contracted at a slower rate. 

The annual change in durable goods capacity utilization contracted at an accelerating rate for the eighth month in a row, falling to -7.7% from -6.4%. June was the fastest rate of annual contraction since April 2010. As the annual rate of change tends to lead capital equipment consumption by seven-to-10 months, capacity utilization is signaling accelerating contraction in capital equipment spending through at least the third quarter of 2020 and likely through the remainder of the year.

Durable Goods Production Recovering for Second Month

Durable Goods Production Recovering for Second Month

In June, the index for production of durable goods was 95.2. The index increased for the second month in a row after reaching the second-lowest level for the index since January 2010. Compared with one year ago, the index contracted 14.5%, which was the second month in a row that the month-over-month rate of change in the index decelerated. 

The annual rate of change, which is easier to correlate with other data points, contracted 6.6% this month. This was the fourth consecutive month of accelerating contraction. The key leading indicator of production—durable goods new orders—is indicating further contraction in production.

Cutting Tool Orders May Have Reached Low Point

Cutting Tool Orders May Have Reached Low Point

In May 2020, real cutting tool orders were $136.6 million, which was the sixth time in seven months that orders were below $190 million. Also, this was the lowest level of cutting tool orders since the data was made public in January 2012. Compared with one year ago, cutting tool orders contracted -36.5%, which was the 15th consecutive month of month-over-month contraction. Also, this was the fastest rate of month-over-month contraction since the data was made public and the second month in a row that contracted faster than 30%.

The annual rate of change contracted at an accelerating rate for the eighth month. The annual rate of contraction was 12.3%, which was the fastest rate of annual contraction since the data was made public. At the beginning of 2020, the Gardner Business Index: Metalworking indicated that the annual rate of contraction in cutting tool orders would bottom out in the summer of 2020. However, the pandemic accelerated the contraction in metalworking and extended the accelerating contraction in cutting tool orders.

Gardner Intelligence sat down with Christina Fuges, Editorial Director of Moldmaking Technologies Magazine to talk about the June 2020 Moldmaking Business Index data.   Just months after COVID forced the shutdown of many segments of the U.S. and global economies, the moldmaking and molding industries were already reporting by June that they were seeing initial signs of a rebound in new orders.

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.