8/14/2017 | 2 MINUTE READ

July Production Machining Business Index Holding Steady

Facebook Share Icon LinkedIn Share Icon Twitter Share Icon Share by EMail icon Print Icon

The Gardner Business Intelligence (GBI) Production Machining index registered 53.1 for July. The index is more than 20 percent above its July value from one year ago.

Share

Facebook Share Icon LinkedIn Share Icon Twitter Share Icon Share by EMail icon Print Icon

Related Suppliers

Production Machining Index chart, July 53.1

 

The Gardner Business Intelligence (GBI) Production Machining index registered 53.1 for July. This was down slightly from last month’s reading and below the year-to-date average. The index is still more than 20 percent above its July value from one year ago. The index readings for employment and backlog were stronger while readings for supplier deliveries, production, new orders and exports were lower. The GBI team closely monitors the backlog reading as it is considered a bellwether to capacity usage and ultimately machine tool sales. The July backlog reading of 53.2 is marginally above the year-to-date average reading. Compared with July a year ago, the backlog reading has increased by almost 40 percent. Backlog fluctuations often are a result of changes in new orders and exports.

Since the beginning of the year, the reading for new orders has decreased by 13 percent, ending July at 51.6, indicating that fewer respondents reported new order growth during July than June. In the trailing 12-month period, new orders have improved significantly with a July to July reading improvement of more than 20 percent. New order readings are in part driven by the dynamics of the export market, as exports constitute a portion of total new orders.

The exports reading ended July at 46.5, indicating that more respondents cited decreasing exports in July than in June. Exports readings in the trailing 12 months have moved in a range between 44 and 50, with a higher number of respondents reporting decreasing exports than increasing exports.

Throughout 2017, GBI has heard from manufacturers about their concerns over finding qualified talent. Demand for skilled manufacturing laborers has grown significantly across the country as evident by the fact that the June unemployment rate in manufacturing at 3.4 percent was a full percentage point lower than the total civilian unemployment rate at 4.4 percent. GBI’s employment readings indicate that hiring among production machinists increased quickly during the last quarter of 2016 and the first quarter of 2017. In three of the first seven months of this year, our data recorded three employment readings that surpassed the record high reading set in 2014.

Among reporting job shops within the Production Machining industry, respondents over the last 12-months have reported significantly growing material prices; concurrently, readings for prices received have been growing more tepidly. In the 12 months ending July 2017, the reading for material prices increased by almost 25 percent while the reading for prices received increased by less than 6 percent.

For more information about the July GBI as well as past GBIs, visit gardnerweb.com/economics/blog.


Resources