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June 2014 MBI Shows Consistently Strong Growth

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With a reading of 53.6, the June metalworking index showed that the industry continues to grow at a strong rate. The index was higher than 53.0 every month in the first six months of 2014, and the industry grew eight of the last nine months. The June index also was 17.0 percent higher than it was one year earlier. For the fourth month in a row, it grew by more than 10 percent, which was the fastest rate of growth since July 2010. Annually, the industry has grown at an accelerating rate the last four months and is growing at its fastest rate since April 2011.

Both new orders and production increased for the ninth month in a row, however these rates of increase have decelerated since March. Backlogs contracted at a very moderate rate for the third month in a row, but they are expanding at a rapid rate compared to one year earlier. The annual rate of change in backlogs continues to accelerate, which is a positive sign for future capacity utilization levels and capital spending. Employment has expanded since last October, and in June grew at its fastest rate since September 2011. Exports contracted for the third straight month, and supplier deliveries continued to lengthen at a slightly increased rate, as they have since June 2013.

Material prices have increased at a faster rate this year and are at their fastest rate of growth since March 2012. Prices received by the metalworking industry increased for the second month in a row, and while future business expectations remain near the peak levels of this expansionary cycle, they have dipped slightly since February.

Future capital spending plans reached their second highest level of 2014 and have grown month-over-month for four straight months. In June, future spending plans increased 13.1 percent compared to one year earlier. Annually, future spending plans are growing at a rate of 4.0 percent, the fastest rate of growth this year.