Metalworking Activity is on a Roll, Relatively Speaking

February is the third straight month of slowed contraction (a good thing) in metalworking activity as the index creeps closer to 50. February closed at 47.7, up 1.4 points relative to January. February marked slowing of contraction in new orders to the tune of 3.6 points, along with 2.4 points of slowing contraction in production, drove slowed contraction overall.

February brought backlog into the slowing contraction fold, interrupting its long-standing trend of accelerated contraction in place since September of 2022. Employment and exports contracted at steady rates, the former consistently closer to 50 than the latter, which has changed little since arriving at its current index in August of 2022. Supplier deliveries lengthened at a slow rate that has stayed about the same for the past six months, which is neither particularly encouraging nor discouraging.

Optimism for future business (not included in GBI calculation) grew faster in February for the fourth straight month. The sentiment is at least hopeful — if not encouraging — that real business will follow.