April GBI: 54.1

With a reading of 54.1, the Gardner Business Index showed that durable goods manufacturing grew for the sixth month in a row. This was the first of the six months that the industry did not grow faster than previous month. The first four months of 2017 were the fastest growth in durable goods  

The new orders index increased for sixth month in a row, but the rate of growth slowed for the first time. The production index increased for the ninth consecutive month. After three months above 60, the index dropped noticeably. The backlog index increased for the fourth straight month. The trend in the backlog index clearly indicated capacity utilization should increase in 2017. Employment increased for the seventh month in a row but at a decelerating rate for the second month in a row. Exports is the one area that continued to contract. Supplier deliveries have lengthened at an accelerating rate since last fall and In April lengthened at their fastest rate since April 2012.

Material prices increased dramatically since November 2016. However, the rate of increase slowed slightly from last month. Prices received increased for the fifth month in a row, but the rate of increase decelerated for the second month. Future business expectations remained strong, but the index fell back below the November level.

Plants with more than 250 employees grew for the seventh straight month with very strong growth the last four months. Facilities with 100-249 employees grew for the sixth month in a row. Two of the last three months had an index above 60.0. Companies with 50-99 expanded for the eighth time in nine months. Companies with 20-49 employees grew for the seventh straight month. Companies with fewer than 20 employees expanded for the fourth consecutive month.

The South Central was the fastest growing region in April. It has grown for five months in a row. It was closely followed by the North Central-East and North Central-West regions. The Southeast and the Northeast also grew. The West was the only region to contract, which it last did in December 2016.

The fastest growing industries were hardware, power generation, industrial motors/hydraulic/mechanical components, furniture, petrochemical processors, machinery/equipment, medical, oil/gas-field/mining machinery, primary metals, pumps/valves/plumbing products, automotive, aerospace, custom processors, metalcutting job shops, other, electronics/computers/telecommunications, and forming/fabricating (non-auto). Plastics/rubber products was flat. All other industries contracted.

In addition to the overall durable goods index, we compute indices for several technologies or processes. In April, metalworking was the fastest growing technology. It was followed by moldmaking, composites, precision machining, plastics, and finishing.