GBI Shows Multiple Trends in Manufacturing Industry

The GBI components imply that the upstream market has done a commendable job of moderating production since early 2018.

The Gardner Business Index (GBI) sustained the same growth rate as recorded in the prior month with a reading of 50.8. The Index has fallen 6.2% from the same month one year ago. Index readings above 50 indicate expanding activity while values below 50 indicate contracting activity. The further away a reading is from 50 the greater the magnitude of activity change. Gardner Intelligence’s review of the underlying data for the month observed that the Index – calculated as an average of its components – was supported by supplier deliveries, production, employment and new orders. Exports and backlogs both contracted during the month, pulling the Index lower. Backlog activity in June contracted for another month as production activity grew relatively faster than new orders.

Gardner Business Index

Data from recent months has indicated several trends. First, supplier deliveries activity has shadowed production levels very closely throughout 2019. This activity implies that the upstream market has done a commendable job of moderating production since early 2018 when manufacturers reported experiencing strong new orders growth and stressed supply chains to increase capacity.

Secondly, Gardner’s year-to-date data shows relatively greater levels of production activity compared to new orders. This trend has been sustainable only through manufacturers drawing down backlogs. Gardner Intelligence will continue to carefully monitor how an ever-changing economic landscape affects the equilibrium between these indicators.

The trend in contracting exports continues to worsen. The trend first started in August of 2018, not long after the first trade tariffs went into effect. With the addition of new layers of tariffs on U.S. exports and imports since then the, contraction in exports has worsened. Manufacturers of all sizes have reported relatively similar export conditions.

The fastest growing industries during the month were aerospace, hardware, plastics/rubber products, primary metals, electronics/computers/telecommunications, custom processors, machinery/equipment, metalcutting job shops and automotive. 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 Moldmaking, Metalworking, Plastics, Finishing and Production Machining. All technologies expanded during the month.


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.