Gardner Business Index, Precision Machining: December 2016 -- 53.7

With a reading of 53.7, the Gardner Business Index showed that the precision machining index grew at an accelerating rate for the second straight month. The index has improved dramatically since July when it was only 43.0. In December, the index reached its highest level since March 2015.

New orders grew for the fourth time in five months. Despite a slight drop in December, this index was still at its highest level since May 2014. Production increased for the fourth month in a row. The backlog index increased for the first time since August 2014. This was a strong indication that capacity utilization will increase in 2017. Employment increased for the second month in a row and at the fastest rate since July 2015. Despite continued contraction, the export index was at its highest level since March 2014. Supplier deliveries continued to lengthen. 

Material prices increased at a significantly faster rate in December. This index was its highest level since September 2014. Prices received shot up in December. They increased at the fastest rate since June 2014. After a huge jump because of November’s election results, the future business expectations index continued to climb in December, reaching its highest level since the index began in December 2011.

The electronics industry had strong growth in December. The aerospace index increased at a significant rate for the third straight month. Machinery/equipment also grew for the third month, and job shops increased for the second month in a row. Automotive was flat after growing the previous month. 

The South Central region was the fastest growing region for the second straight month. Both months its index was above 60.0. The West grew for the fourth month in a row. The North Central-West grew for the third time in four months. The Southeast remained strong, growing for the fourth time in five months. The Northeast grew for the second straight month as did the North Central-East.

Facilities with more than 250 employees expanded for the first time since August. Plants with 100-249 employees expanded for the third time in four months. Plants with 50-99 employees grew for the ninth time in 10 months. It was the first time their index went above 60. Shops with 20-49 employees grew for third consecutive month. Shops with fewer than 20 employees expanded for the second month in a row.