The Gardner Business Index (GBI) measures the current state of durable goods manufacturing activity through survey responses covering new orders, production, backlog, employment, exports and supplier deliveries. A reading above 50 indicates expansion; below 50 indicates contraction.

The GBI eased for a fourth consecutive month in August, dropping just over half a point to 54.4 while holding comfortably in expansion for an eighth straight month. The softer overall reading masked a mixed and in some ways encouraging set of results. Production strengthened nearly two points to 59.5, even as new orders and employment each pulled back more than a point, suggesting shops are working through healthy order books rather than facing a demand collapse. Supplier deliveries held elevated at 62.0 and exports slipped to 45.9, remaining the lone component in contraction.

Cost pressure continued to ease, with the share of shops reporting higher material costs falling. The material prices reading decreased for a third straight month to 79.2, down from 85.4 in May. This elevated reading still indicates material costs are rising, but at a slower rate. Prices received ticked up two points after several months of decline, indicating potential relief to margins if the trend continues. While they are important market signals, these pricing components do not factor into the overall GBI reading.

Capital spending intentions strengthened as well. The three-month average estimated spend per plant climbed to roughly $558,000 from about $513,000, and the share of facilities planning capital purchases grew two points to 74%. Optimism firmed, with the Future Business Index, on a three-month average basis, rising to 65.9.

The Gardner Business Index eased to 54.4 in August but held in expansion for an eighth straight month. Source (All Images) | GROW Industrial Intelligence 

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

On a three-month average basis, all six core components remain above their year-ago levels, led by production; exports (46.9) is 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 $558,000 on a three-month average basis, up from about $513,000, while the share of plants planning capital purchases rose to about 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.

The three-month average for the Future Business Index rose to 65.9 in August, keeping forward-looking sentiment firmly positive.