Gardner Business Index: Precision Machining, January 2017 - 56.0

In January, the index reached its highest level since January 2014.

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With a reading of 56.0, the Gardner Business Index showed that the precision machining index grew at an accelerating rate for the third straight month. The index has improved dramatically since July when it was only 43.0. In January, the index reached its highest level since January 2014.

New orders grew for the fourth month in a row. The index was at its highest level since February 2012. Production grew rapidly in January, with the index reaching its second highest level since the survey began in December 2011. The backlog index increased for the second straight month, reaching its highest level since January 2014. This was a strong indication that capacity utilization will increase in 2017. Employment increased for the third month in a row and at the fastest rate since July 2015. Exports continued to contract. Supplier deliveries continued to lengthen. 

Material prices increased at a significantly faster rate throughout the previous two months. The index was just below its highest level since the survey began. Prices received increase at almost the same rate as in December. In the previous two months, prices received have increased at the fastest rate since June 2014. After a huge jump due to November’s election results, the future business expectations index continued to increase throughout the previous two months, setting an all-time record both months.

Automotive, primary metals, and aerospace all had indices above 60 in January. Almost every other industry had an index of at least 54. It was a strong month all around.

Every region had strong growth, but the West grew the fastest. It has grown five straight months. While the South Central was the slowest growing region, it expanded for the fifth time in six months. 

Facilities with more than 250 employees expanded significantly for the second straight month. Plants with 100-249 employees were flat. Plants with 50-99 employees had an index above 60 for the second consecutive month. Shops with 20-49 employees also had an index above 60, which was their fastest growth since the survey began. Shops with fewer than 20 employees expanded for the third month in a row.