Index Moves Markedly Higher After Falters in Second Quarter
July reading advances 11 points, closing gap with other manufacturing technologies.
Precision Machining Business Index: The Precision Machining Index advanced 11 points due to significantly higher activity readings for new orders, production and backlog.
Business activity as measured by the Gardner Business Index (GBI): Precision Machining gained 11 points in July, bringing the latest reading to 48.3. (Increasing readings which are below 50 indicate slowing decline as compared to the prior month, while a reading of 50 represents ‘no change’ in business activity.) The improvement in the index was broad-based as all components reported significantly higher readings in absolute terms. July’s new orders and production readings fell just short of a reading of ‘50,’ reporting gains of nearly 18 and 15 points, respectively.
New Orders, Production Report Significantly Improved Monthly Readings: After weighing down the Precision Machining Index in recent months, new orders and production activity readings both advanced strongly, sending the Index higher in July.
During May and June, the production machining industry experienced a faltering in overall activity not experienced to the same degree by other manufacturing technologies. This opened a gap between the PM Index and Gardner’s other manufacturing indices. In particular, new orders, production and backlog activity as reported by production machinists experienced a relatively longer and deeper contraction compared to other manufacturing industries. July’s substantial improvement among these components helped to close this gap. By end-market served, production machinists serving the aerospace and/or medical markets reported expanding business activity in July after indicating deeply contractionary activity in prior months.