GBI: Metalworking January 2017 – 53.8

With a reading of 53.8, the Gardner Business Index showed that the metalworking industry grew in January for the first time since March 2015, reaching its highest point since May 2014. This also is close to its fastest rate of growth since April 2012.

New orders increased for the third straight month and at their fastest rate since March 2014. The same was true for the production subindex. Although it is still contracting, the backlog subindex continued the steady improvement that began last June and reached its highest level since August 2014. This trend in backlogs indicates that capacity utilization should increase in 2017. Employment increased for the third time in four months and at its fastest rate since July 2015, while exports continued to contract. Supplier deliveries continued to lengthen.

Material prices increased at a dramatically faster rate for the second month in a row. In fact, they increased at their fastest rate since February 2012. Prices received also increased for the second straight month and at their fastest rate since January 2014. After a huge spike in November attributed to the results of the presidential election, future business expectations increased in both December and January, moving above 80 for the first time since July 2011.

The primary metals sector grew in January for the fourth time in five months and at its fastest rate since June 2015. This is a positive sign for the metalworking industry, since all its manufacturers need metal to cut. The forming/fabricating industry grew at a very strong rate for the second month in a row, and metalcutting job shops grew at their fastest rate since June 2014. In fact, all but a few industries expanded in January.

The Northeast was the fastest growing among all regions of the country. It was closely followed by the North Central-East and North Central-West. The South Central also grew for the first time since November 2014. The West was the only U.S. region that did not grow.

Shops of all sizes showed growth in January. Plants with more than 250 employees grew at an accelerated rate for the fourth month in a row; facilities with 100-249 employees expanded for the fourth time in five months; shops with 50-99 employees grew for the fifth time in six months; those with 20-49 grew at their fastest rate since at least December 2011; and those with fewer than 20 employees expanded for the first time since June 2015.

More news from Gardner Business Intelligence can be found on this Economics Blog.