March MBI at 54.6 – Slower Growth

With a reading of 54.6, the MBI showed that the metalworking industry is still growing but it is doing so at the slowest rate since August 2010. The main reasons for the slowing growth in March were contractions in the employment, backlog and exports subindices. Each of the subindices moved from growth to contraction in March. Also, production slowed in March to its slowest rate of growth since October 2010. However, the growth in production is still at a relatively high level. 

 

Counteracting these moves were a slight uptick in new orders, which remain quite strong, and a significant increase the supplier delivery subindex. The increase in the supplier delivery subindex is most likely due to the disaster in Japan and its ripple effect throughout the manufacturing supply chain. The future business expectations subindex continues to fall. It is at its lowest level since July 2009. Also, it is below its historical average, meaning that respondents are less optimistic right now than they are in general. 

 

Comments from respondents varied, including “apprehensive about the recovery,” “seeing an increase in quoting activity for new parts,” “a slowing of new activity of late” and “year-over-year revenue continues its unabated growth.”