Gardner Business Index (GBI): Metalworking Set Two-Year Expansion Record

The Gardner Business Index (GBI): Metalworking registered 53.4 for December. Although December’s above-50 reading was slightly lower than the prior month, it was still a milestone for the Metalworking Index: It marked the first time in recorded history that the index has recorded two years of consecutive expansion. Furthermore, it established 2018 as the fastest expanding calendar year since 2012, with an average monthly reading of 57.7. (The prior record was set in 2017 with a reading of 55.8.) The index was supported by supplier deliveries, production, new orders and employment. Backlogs and exports contracted during the month, pulling the average-based index reading lower.

Among all components, supplier deliveries registered the fastest rate of expansion since April, suggesting that manufacturing supply chains were still reacting to the unprecedented expansion of new orders initiated during the first quarter of 2017. As recently as October, new orders readings registered above 60; however, most components in recent months signaled slowing growth. Should the first quarter or first half of 2019 experience additional periods of slower growth in new orders and production, manufacturers will have to carefully monitor and adjust their input supply flows.