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March MBI at 53.4 – Growth Rate Stabilizes
The Metalworking Business Index (MBI) is created from a monthly survey sent to manufacturing executives in the durable goods industries. The MBI is a diffusion index based on 50.0; it functions in the same way as the ISM’s PMI. When the MBI
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Source: Gardner Research 2009 March MBI at 53.4 - Growth Rate Stabilizes Sign up to participate in the Metalworking Business Index (MBI) at gardnerweb.com/mbi. |
is above 50.0, the metalworking industry is expanding; when the MBI is below 50.0 the industry is contracting. The total MBI is a weighted average of the subindices for new orders, production, employees, inventories, exports, and supplier deliveries.
With a reading of 53.4, the MBI signaled that the pace of growth in the metalworking industry stabilized in March. See gardnerweb.com/mbi/MBIResults.htm.
However, the new orders sub-index could be giving an indication that the MBI will continue to move down in future months. The new orders sub-index dropped to 50.0 in March from 61.1 in February. This was the third straight month of slower growth in new orders. Slowing new orders should lead to a lower production sub-index in future months.
Also, because the production index is still growing while orders are slowing, the backlog sub-index should be pressured to move lower as well.
Employment continues to grow at a healthy clip, but it will be interesting to see how a slow down in new orders and the passage of health care legislation affects employment in the metalworking industry.
Material prices continue to grow at a faster rate, putting more pressure on margins at metalworkers. Steel and aluminum were mentioned by several respondents as materials going up in price.
Future business expectations improved modestly compared to February but they still seem to be in a down trend that started in October 2009.
Need more information?
Contact your GPI representative or
Steve Kline, Jr.
Director of Market Intelligence
Gardner Publications, Inc.
800-527-8837 • 513-527-8837
800-950-8020 • 513-527-8800
Fax: 513-527-8801
S2@gardnerweb.com