Gardner Business Index: Precision Machining January 2023

According to Gardner Intelligence, the Gardner Business Index: Precision Machining contracted again in January, but a bit more slowly than the three months prior — closing nearly flat at 49.8 compared to December’s 47.5. (See last month’s reading.) 

GBI: Precision Machining component activity in January looked a lot like December.

• Four of the six GBI components contracted again in January.
• New orders was the one component that saw a change in terms of slightly slowed contraction following a December low not seen in about 2.5 years. 
• Production did not follow suit, instead staying about the same in January as December. The return of production activity to at least flat in the near future may not be out of the question.
• Contracting more and faster than production is backlog which stayed about the same in January. Given the nature of backlog, it is not surprising that it could be slower to bounce back than new orders.
• Employment dodged contraction and continued to grow at a slightly faster rate in January. 
• Exports continued to contract, but at a slightly slower rate, which is bigger than it may appear because exports have been contracting faster each month since August 2020.  
• In January, supplier deliveries saw another month of slowed growth that began in July 2021 — indicating supply chain issues may be on the mend or workarounds are in place.
• Future business is a sentiment metric that is not part of the GBI calculation, but worth noting this month as it grew faster. More shops are saying business will be better in the next 12 months.

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Precision Machining Index

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Key Components (3-month moving average)