Metalworking Activity is Nearing a Full Year of Contraction

Metalworking activity contracted again in September, closing at 44.8, down from August’s 46.0. Metalworking activity has, in fact, contracted since October of 2022, generally at an accelerated rate each month. February 2023 saw a slight reprieve (flat), which proved to be a one-month fluke.

All components continued to contract in September, with the exception of supplier deliveries which have been marching to their own tune for months. The rate at which components contracted in September was generally steady, thereby minimizing the drop in overall GBI. It will be interesting to follow employment, the newest member of contraction territory. Expansion in employment that had been driven by workforce dynamics during the COVID-19 pandemic may be contracting to normalize and/or as a function of rising costs/interest rates. Future business expectations, which were included in the survey but not the GBI calculation, continued to expand at the same rate as August.