March MBI Shows Fastest Growth in Two Years

With a reading of 55.9, Gardner’s metalworking business index showed that conditions in the industry expanded in March for the third straight month and the fourth time in five months. This was the fastest rate of growth since March 2012. Since August, the metalworking industry has been on a steady and significant uptrend. The March index was 10.9 percent higher than it was in March 2013, which is the seventh straight month of year-over-year growth. Also, March was the fastest rate of month-over-month growth so far this year. The annual rate of change grew for the first time since September 2011.

New orders and production grew for the sixth consecutive month, both at significantly faster rates than the first two months of the year and at their fastest rates since March 2012. The backlog index also grew for the second time in three months, indicating that capacity utilization and capital spending at metalworking facilities should increase significantly this year. Employment has grown at a consistently high rate in each of the first three months of the year, similar to the rates of growth at the end of 2011 and beginning of 2012. Exports were flat, the first time they have not contracted since September 2011. Supplier deliveries continue to lengthen at a steadily increasing rate as they have done since last June.

Material prices continued to increase, but they did so at the slowest rate of the first quarter. Prices received increased for the fourth straight month, but the increase was minimal in February and March. Future business expectations remain strong and have been very stable throughout the quarter.

After contracting the first two months of 2014, future capital spending plans improved 2.7 percent in March compared to one year earlier. Despite this improvement, however, the annual rate of change contracted at a faster rate for the second consecutive month.