GBI for December: 50.4

With a reading of 50.4, the Gardner Business Index shows that durable goods manufacturing grew for the second month in a row. Durable goods manufacturing grew at a slightly faster rate this month than last month. These were the first two months of growth since March 2015.

The new orders index increased for second month in a row and the third time in five months. Production expanded for the fifth month in a row. The backlog index climbed to its highest level since January 2015. The trend in the backlog index clearly indicated capacity utilization should increase in 2017. Employment increased at an accelerating rate for the third month. While the exports index continued to contract, the index has improved steadily since July. Supplier deliveries lengthened for the 11^th month in a row.

Material prices increased at a significantly faster rate in December. The index reached its highest level since October 2014. Prices received increased for the first time since May 2015. The rate of increase was the fastest since July 2014. After a huge spike due to last month’s election results, the future business expectations index crept higher in December, setting a record high for the second month in a row.

Plants with more than 250 employees grew at an accelerating rate for the third month. Facilities with 100-249 employees grew for the third time in four months. Companies with 50-99 expanded for the fourth time in five months. Companies with 20-49 employees grew for the third straight month. Companies with fewer than 20 employees continued to contract, but the rate of contraction was the slowest since June 2015.

The Southeast has been the strongest region since November 2015. It has grown five months in a row. The South Central grew for just the second time since December 2014. The Northeast expanded for the second consecutive month. The North Central-East was flat. And, the North Central-West and West contracted at minimal rates.

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

In addition to the overall durable goods index, we compute indices for a number of technologies or processes. For the second month in a row, precision machining grew at the fastest rate. Moldmaking grew for the fourth time in five months. Composites also grew in December. Metalworking, plastics, and finishing contracted.