GBI for April: 46.1

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(Positive) With a reading of 46.1, the Gardner Business Index showed that business conditions in durable goods manufacturing contracted in April after being unchanged in March. March was the only month in the last 13 months that the GBI has not contracted.

New orders contracted faster than they did in February after expanding in March. After increasing last month, production contracted at its fastest rate since December 2015. Backlogs remained in contraction as the rate of contraction accelerated in April. Employment also moved back into contraction after one month of growth. Exports contracted at their fastest rate since November 2015. Supplier deliveries lengthened at an accelerating rate for the third straight month.

Material prices increased for the second month in a row. Prices received continued to decrease, but the rate of decrease has slowly decelerated since November 2015. Future business expectations fell off in April, but they remained above the level since last August.

Plants with more than 250 employees expanded for the second month in a row. Facilities with 100-249 employees contracted for the fourth consecutive month. Facilities with 50-99 employees contracted after expanding last month. Companies with 20-49 employees contracted after growing the previous two months. Companies with 1-19 employees continued to contract.

The Southeast was the best performing region for the sixth month in a row. The Southeast grew at its fastest rate since November 2014. It was followed by the Northeast, which was the only other region that grew in April. The North Central-West and West regions contracted after expanding last month. The North Central-East has contracted since June. The South Central contracted at a faster rate as the index fell to its lowest level since December 2015.

Ship building was the fastest growing industry in April, but that is based on limited response. It was followed by petrochemical processors, HVAC, plastics/rubber products, and other manufacturing. All other industries contracted. From slowest to fastest contraction they were electronics/computers/telecommunications, custom processors, medical, automotive, forming/fabricating (non-auto), primary metals, machinery/equipment, metalcutting job shops, aerospace, power generation, hardware, industrial motors/hydraulics/mechanical components, pumps/valves/plumbing products, military, off-road/construction machinery, and oil/gas-field/mining machinery.

In addition to the overall durable goods index, we compute indices for a number of technologies or processes, all of which contracted in April. From slowest to fastest contraction, they were plastics, moldmaking, composites, metalworking, finishing, and precision machining.

Planned capital expenditures for the next 12 months jumped to their highest level since February 2015, nearly reaching their historical average. Compared with one year ago, planned spending increased 35.1 percent, which was the first month of growth since August 2014. The annual rate of change has contracted at a slower rate each of the last two months.