Gardner Business Index: Precision Machining, November 2016 - 52.6

With a reading of 52.6, the Gardner Business Index showed that the precision machining index grew for the first time since May 2015. The index has improved dramatically since July when it was only 43.0.  

New orders grew for the third time in four months. November’s new orders index was the highest since March 2012. Production expanded for the third month in a row. While still contracting, the backlog index reached its highest level since March 2015. The trend in the backlog index showed that capacity utilization should be increasing soon. Employment increased for the first time since July 2015. Exports continued to contract, but the index has been notably higher the previous four months. Supplier deliveries have lengthened eight of the previous nine months.

Material prices continued to increase at a significant rate. The material prices index was at its second highest level since February 2015. Prices received decreased for the second month in a row. Future business expectations skyrocketed in November. The index jumped more than 12 points to 77.8, which was its highest level since January 2012. Given the proximity of the survey to the election, it is reasonable to conclude that the precision machining industry is bullish on President Trump.

The equipment index grew at an accelerating rate the previous two months. The automotive index jumped significantly in November compared with the previous six months. And, job shops grew for the first time since March 2015.

Five of the six regions expanded in November. The South Central was the fastest growing region and has grown three of the last four months. It was closely followed by the Southeast, which also has grown three of the last four months. The North Central-East grew for the first time since June 2015. The West increased for the third straight month. The Northeast expanded for the first time since March. The North Central-West contracted after two months of growth.

Facilities with more than 250 employees contracted for the third month in a row. Plants with 100-249 employees expanded for the second time in three months. Plants with 50-99 employees grew for the eighth time in nine months. Shops with 20-49 employees grew at an accelerating rate for the second month in a row. Shops with fewer than 20 employees grew for the first time since March 2015.