Metalworking Index Closes 2020 With Near Two-Year High
The Gardner Business Index: Metalworking reached a 53.6 reading for December 2020, closing the year with a nearly two-year growth high.
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The Metalworking Business Index closed 2020 at a near two-year high thanks in part to strong new orders and production activity. Five of the Index’s six business components expanded during December.
Photo Credit: Gardner Intelligence
The Gardner Business Index (GBI): Metalworking closed 2020 on a high note with the December reading of 53.6 setting a nearly two-year high. December’s reading also marked the third consecutive month of overall expanding business activity in the metalworking industry. All six components of the Index moved higher in absolute terms from the prior month. Rising readings for production and new orders – which were already above a reading of 50 in November – indicated a further expansion in business activity during December. Employment and backlog activity readings rose above 50, indicating a transition from contracting activity to expanding activity in December. The reading for export activity, while higher from November, remained below 50, indicating a slowing contraction in activity.
A preponderance of respondents to the Metalworking Index indicated lengthening delivery times for production inputs. Slowing delivery times can limit production capacity and by extension heighten backlog levels.
Photo Credit: Gardner Intelligence
The Index’s December supplier deliveries reading set a new all-time high, indicating that a large majority of metalworking shops experienced lengthening order-to-fulfillment times. This was not entirely unexpected given that the seasonal surge of holiday e-commerce orders and early distribution of COVID-19 vaccines put an unprecedented strain on the country’s transportation networks. Manufacturers will need to continue reinforcing their supply chains to remain competitive and productive in 2021.
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