December Metalworking Index at 44.8 – Contraction Slows
With a reading of 44.8, the Metalworking Business Index showed the metalworking industry contracted for the sixth consecutive month. However, the rate of contraction slowed and there was improvement in almost every sub-index.
New orders and production both contracted more slowly in December compared to November. Because new orders improved more than production there was a significant slowing in the rate of contraction for backlogs. Employment and exports were virtually unchanged in December. Supplier deliveries lengthened slightly in December, which is in line with the slight improvement in the overall index. Also, future business expectations improved significantly in December compared to November. The one negative in December is that materials prices continued to increase faster while prices received decreased for the fourth month in a row. This means that profit margins are getting squeezed more each month.
Due to a new database and survey method, we can now track how the metalworking industry is performing across plant sizes, regions of the country, and industries served. As long as there is a minimum of 10 responses for any combination of variables an index can be calculated. While the metalworking industry as a whole is contracting, there are industries that are growing, including electronics, computers, and telecommunications (57.8), medical (54.2), automotive (51.0), and pumps, valves, and plumbing products (50.6). Also, the aerospace industry was virtually flat. Shops with fewer than 50 employees contracted at a much faster rate than other facilities. In fact, facilities with 100-249 employees grew while shops with more than 250 employees were virtually flat in December. The rate of contraction was relatively uniform throughout the country; however, two regions stood out. The contraction in the mountain region (39.6) was much faster than the rest of country but the contraction in the south Atlantic (47.1) was noticeably slower.
For more results, go to http://www.gardnerweb.com/mbi/MBIResults.htm.
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