Gardner Business Index Continues to Cool into Ninth Consecutive Month of Expansion

A drop in production dipped the Index for a fifth straight month, but future business expectations and capital-spending intentions remain strong.

Mike Shirk

Senior Market Research Analyst, GROW Industrial Intelligence

The GBI eased for a fifth consecutive month in September, slipping just less than a point to 53.5 while holding in expansion for a ninth straight month. The month's main drag was production, which gave back nearly six points after a strong August and accounted for most of the Index’s decline. Elsewhere the picture was steadier: employment firmed more than a point, supplier deliveries held elevated at 63.5, and new orders and backlog eased only modestly, with backlog settling just above the break-even line at 50.9. Exports held at 45.6, remaining the lone component below 50. After three months of easing, material prices ticked back up to 82.3, a reminder that input-cost pressure has not fully resolved, while prices received held near 64.0.

Capital spending intentions continued to strengthen. The three-month average estimated spend per plant rose to roughly $575,000 from about $558,000, while the share of facilities planning any capital purchases held near 74%. Optimism among manufacturers remains strong, with the Future Business Index, on a three-month average at 65.0.

The GBI Components Scorecard reports the monthly change rate of primary market factors contributing to the overall monthly index reading.

The three-month average for all six core components remain above their year-ago levels, with exports the sole component below 50.

Reading the Scorecard: Color indicates where a component value falls relative to 50 for the current month. Green indicates expansion; red indicates contraction.

Shade indicates a value's distance from 50; the darker the shade, the further from 50.

Direction indicates a value's change versus the previous period. Pointing up is always better.

GBI Spending Intentions reports the average estimated spending per plant over the next 12 months and the percent of facilities indicating they do not plan to make capital purchases. Both are reported as a three-month moving average.

Average spend per plant rose to roughly $575,000 on a three-month average basis, up from about $558,000, while the share of plants planning any capital purchases held near 74%.

The GBI Future Business Index is an indicator of the future state of the metalworking market from industry respondents regarding their opinion of future business conditions for the next 12 months. Over 50 is expansion and under 50 is contraction.