Business Activity Quickens Thanks to Broad-Based Gains

The Gardner Business Index (GBI) moved nearly 3 points higher in October to end at 60.7.

Gains were widespread thanks to quickening activity in backlogs, new orders, production and employment. Export orders registered an additional month of contracting activity; however, the level of contraction was the lowest recorded since July. Gardner’s measure of supply chain performance marked a repeat reading from the prior month. Removing the influence of supply chain activity from the GBI, the total index would have registered 56.4 in October, up more than 3 points from the prior month. Compared to historic readings of total activity less supply chain activity, the latest reading is almost a full point higher than the average reading recorded during the industry’s expansionary boom in 2017-2018. During that prior boom, the average reading was 55.8.

October’s supply chain reading in excess of 80 points marks the sixth time in the last seven months that as many as 80% of survey respondents signaled that supply chain performance was worse in the latest month as compared to the prior month. The sustainment of such ominous readings has caused a series of other problems for the industry. The most notable of these is a “production deficit” represented by the spread between strong new orders and relatively weaker production readings. The result of this spread has elevated backlog activity to pre-pandemic highs throughout most of the last two quarters.