Metalworking Index Plateaus After Blistering First Quarter
Expansion of the Metalworking Index slowed in April, falling slightly to 62.2. Every component reported expanding activity, with the exception of exports.
The metalworking manufacturing industry reported slowing expansion during April as the Metalworking Index fell slightly to 62.2. Every component of the Index except exports reported expanding activity. The supplier delivery reading rose three points to establish a new all-time high reading. During each of the last four months ending with April, the supplier delivery reading has established new all-time high readings. Supplier delivery readings rise when a growing proportion of surveyed metalworking manufacturers signal slowing order-to-delivery times from upstream suppliers. The current combination of strong orders and production coupled with slow supply chains has resulted in nearly all survey respondents reporting rising material input prices in recent months.
April reported a combination of slowing new orders and accelerating production activity, narrowing the activity spread between measures which had caused backlog levels to rapidly expand. The combination of an expansionary total new orders reading and contracting export orders reading implies that April’s expanding new orders activity was driven by domestic orders. Further, rising production levels suggest that employment activity has further room to rise. During the peak of the 2018 business cycle, production expansion peaked four months before employment activity.
The Metalworking Index fell slightly to 62.2 in April. The Index reported slowing expansion in new orders, backlogs, employment and exports activity.
At the peak of the 2017-2018 business cycle, production activity led employment activity by 4 months.
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The Gardner Business Index: Metalworking moves back to former growth levels from earlier in business cycle.
Slow supply chains and rising prices are still challenges in the near-term.
With a reading of 43.3, Gardner’s Metalworking Business Index showed that the industry contracted in August for the fifth month in a row to its lowest level since July 2009, when the index was 36.5.