Metalworking Index Sets New Record, Lifted by Record Backlog

The Gardner Business Index: Metalworking recorded its second all-time high this year, with a June reading of 63.8.

The Gardner Business Index: Metalworking set its second all-time high in 2021 with a June reading of 63.8. The latest record reading comes just three months after March’s all-time high; the next-most-recent high was in early 2018, when the Index registered just above 61. This latest measure of overall activity was supported by supplier deliveries and backlog readings. While all components of the Index registered expansionary activity in June, production, employment and export orders all expanded at lower levels, which kept the average (and hence the overall Index) reading from moving higher.

The first half of 2021 was notable for having six consecutive months in which new orders readings exceeded those of production. Never before in the ten-year history of the Metalworking Index has such a spread between these measures endured for so long. Reasons for this notable spread include restrained production due to hiring challenges and supply chain delays. Further compounding the issue is the unprecedented demand for manufactured goods. The average new orders reading during the four-month period ending in June was 65, well above any previous four-month average since at least 2011. The latest orders’ strength was a result of both expanding domestic and foreign demand.