Business Activity Advances to the Second-Highest Reading in Recorded History

After moving lower during the past two months, the Gardner Business Index (GBI) rebounded to a near all-time high of 63.1. Respondents to the June survey reported higher activity readings among all six components of the GBI. This is the second time in 2021 that all six indicators reported expanding activity in the same month. The last time such an event happened was in mid-2018, during the peak of the prior economic cycle. The latest overall index reading was supported predominately by another exceptionally high supplier delivery reading — indicative of slow order-to-fulfillment times — as well as from backlog activity which set an all-time high. Production, employment, and export activity all expanded during June but at lower levels, keeping the Index from advancing higher.

The GBI registered its second-highest reading in recorded history during June 2021.

June’s data reported a fifth consecutive month in which new orders activity outpaced that of production. One particularly poignant result of this spread has been the rapid rise in backlog readings throughout 2021. Backlog levels have set new all-time highs in each of the last four months, with the June reading exceeding the prior cyclical high, set in 2018, by over 5-points. Among the reasons for the spread according to the data include the limited availability of new hires, which constrains production growth and strong domestic and foreign new orders.

A Note About Gardner Intelligence and the GBI:

Gardner Intelligence does its utmost to provide regular and informative updates on the state of manufacturing considering the challenges posed by COVID-19. Gardner cannot thank our survey participants enough for their insights and ongoing support. We hope that you will continue to tell us how your businesses are faring. Only through your participation are we able to assess the current state of the industry and where it may be heading. We would encourage our followers and publication subscribers to regularly visit our website blog and connect with Gardner Intelligence on LinkedIn and see our YouTube Channel.