July MBI Virtually Unchanged At 44.5

For the third month in a row, the MBI remained virtually unchanged, moving down to 44.5 from 44.7 in June. While new orders still contracted, they did so at a slower rate. Backlog levels were almost unchanged compared to June. Exports continued to grow at a robust pace. While supplier deliveries were still lengthen

Columns From: 8/25/2008 Modern Machine Shop, , from Gardner Business Media

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Steve Kline, Jr.

Steven R. Kline, Jr.

Metalworking Business Index Juy 08

July Metalworking Business Index www.mmsonline.com/mbi

For the third month in a row, the MBI remained virtually unchanged, moving down to 44.5 from 44.7 in June. While new orders still contracted, they did so at a slower rate. Backlog levels were almost unchanged compared to June. Exports continued to grow at a robust pace. While supplier deliveries were still lengthening, they did so at a slower rate. All of these subindices improved compared to the previous month and would have led to an improved MBI if there had not been such a fall-off in the level of production. Some of this drop could be a seasonal factor, as there was also a noticeable drop in the production subindex in July 2007. With new orders contracting at a slower pace and backlogs remaining relatively constant, production levels should pick up some. Material prices are continuing their significant rise that started in November 2007. Also, material prices have been rising at a faster rate than the prices manufacturers can charge for their products, which has put some pressure on profits. Finally, the future business expectations improved, although it is just above its average level since the MBI was started.

Contact me if you would like to participate in the MBI. Participants receive a monthly e-mail detailing the results of the MBI and an analysis of where I see certain market segments (such as aerospace, automotive and oil) moving in the upcoming 12 months.

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