Economic News Blog
Posted by: Steven Kline, Jr. 1. December 2016

GBI for November: 50.1

With a reading of 50.1, the Gardner Business Index show that durable goods manufacturing grew for the first time since June 2015. The index started with the year with a sharp increase in the first quarter but never got above 50. The index just as quickly dropped. However, the index has steadily increased since June.

The new orders index increased for just the third time since July 2015. Production expanded for the fourth month in a row. The backlog index climbed to its second highest level since June 2015. The trend in the backlog index indicated capacity utilization should improve in the upcoming months. Employment increased for the second straight month. Exports continued to contract but have contracted at a slower and slower rate since October 2015. Supplier deliveries lengthened for the 10th month in a row.

Material prices have increased at a significant rate since May. Although, the rate of increase has declined somewhat since May. Prices received continued to decrease, but the index has improved steadily since November 2015. The future business expectations index jumped more than 12 points to its highest level since the survey started in December 2011. The survey was sent out two weeks and three weeks after the election. This could indicate that durable goods manufacturers feel quite positive about Trump’s election.

Plants with more than 250 employees expanded for the second time in three months. Facilities with 100-249 employees continued to contract after one month of growth in October. Companies with 50-99 employees have the strongest business conditions. They have expanded six of the last eight months. Companies with 20-49 employees grew for the first time since February and the second time since June 2015. Companies with fewer than 20 employees continued to contract, but the rate of contraction was a little slower the last three months.

Four of the six regions grew this month. The Southeast continued to be the best performing region, growing nine of the last 11 months. The Northeast, North Central, East, and West all moved to growth from contraction. The South Central contracted at a minimal rate, improving significantly the last four months. The North Central-West has contracted since March.

The fastest growing industries were ship building, military, aerospace, machinery/equipment, primary metals, and metalcutting job shops. HVAC was flat.  appliances, military, HVAC, and. From the slowest to fastest contraction, plastics/rubber products, forming/fabricating (non-auto), automotive, custom processors, electronics/computers/telecommunications, pumps/valves/plumbing products, industrial motors/hydraulics/mechanical components, other, medical, power generation, hardware, appliances, petrochemical processors, off-road/construction machinery, and furniture.

In addition to the overall durable goods index, we compute indices for a number of technologies or processes. Precision machining grew the for the first time since March 2015. Moldmaking also grew in November. Metalworking, composites, finishing, and plastics contracted.

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