Economic News Blog
Posted by: Steven Kline, Jr. 29. October 2016

GBI for October: 48.6

With a reading of 48.6, the Gardner Business Index show that durable goods manufacturing has contracted at a constant rate the last three months. The index level was virtually the highest since April 2015, except for March 2016.

The new orders index just barely contracted for the second month in a row while production increased for the third straight month. The backlog index continued to contract but the rate of contraction has been significantly slower since November 2015. Employment increased for the first time since March. Exports continued to contract, but the index was at its highest level since November 2014. Supplier deliveries have lengthened since February.

Material prices have increased at a slower rate since June. Prices received have decreased at a generally decelerating rate since November 2015. The future business expectations index dipped slightly in October but remained near its highest level since May 2015.

Plants with more than 250 employees have fluctuated between growth and contraction for most of the last year, but the general trend of the index was flat. All other plant sizes have trended up since late last year to early this year. Of the other plant sizes, only plants with 20-49 employees and 50-99 employees were growing in October. Plants with fewer than 20 employees continued to contract but a slower rate.

The Southeast continued to be the best performing region, growing eight of the last 10 months. All other regions contracted in October. But, the North Central-East, North Central-West, and West seemed to be trending up. The South Central seemed to improve over the last year as well.

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

In addition to the overall durable goods index, we compute indices for a number of technologies or processes. Plastics was the only process to grow. From slowest to fastest contraction, the others were composites, precision machining, metalworking, finishing, and moldmaking. 

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