Metalworking Index Reaches Historic Acceleration in Growth
Supplier deliveries drove the index in September.
Registering 57.1 for September, the Gardner Business Index (GBI): Metalworking recorded strong growth through the third quarter of 2018. The average year-to-date reading of 58.5 is significantly better than the 55.6 average during the same time a year ago. Never in the history of the Metalworking Index have the first three-quarters of the year seen such an acceleration in growth. The Index grew by 1.6 percent from the same month a year ago. Supplier deliveries drove the index for a sixth consecutive month followed by production, new orders and employment.
The readings for backlogs and exports conversely lowered the index’s average-based calculation. After recording growth during the last three months, exports experienced its most significant contraction since the fourth quarter of 2017. The reading was impacted by 10-percent tariffs imposed on $200 billion of Chinese goods by the United States September 24. The tariff rate will increase to 25 percent if a trade resolution is not agreed upon by January 1. Simultaneously, China implemented 5- to 10-percent tariffs on $60 billion of U.S. goods. As supply chains adjust to account for these tariffs, future months of GBI data will be more likely to measure the true impact from the latest tariffs.
The current 21-month economic upcycle represents the longest continuous expansion of the Index in recorded history. While recent trade events may cause some volatility in the near-future, the data since 2017 suggest that long-lived growth in backlogs and new-orders growth may enable the industry to weather near-term order volatility.
Expansion of the Metalworking Index slowed in April, falling slightly to 62.2. Every component reported expanding activity, with the exception of exports.
The Gardner Business Index: Metalworking moves back to former growth levels from earlier in business cycle.
The Gardner Business Index: Metalwork fell to 50.2 in November 2020, indicating that while growth has continued, it is slowing and could turn to another contraction.