November MBI at 66.2 – Strongest Growth to Date

With a reading of 66.2, the MBI showed that the metalworking industry is growing at its fastest rate since the inception of the MBI in December 2006. The previous record high in the MBI was 63.6 in January 2010 and September 2007. The rate of growth has accelerated significantly since August of this year. In November, the rapid rate of growth was caused by significant increases in production, employment and backlog.

The new orders index remained above 70 in November, which is very strong growth. The continued strong growth in new orders forced the metalworking industry to ratchet up its production levels. The production index went above 70 for only the fifth time since December 2006. Despite the significant surge in production, backlogs grew even faster, reaching their fastest rate of growth since the MBI’s inception. With new orders and backlogs growing rapidly, this means that current production levels must continue to grow at a rapid rate in the short term. Therefore, the metalworking industry will either need to run at higher capacities or buy more equipment.

The employment index was also up sharply, which, given the uncertainty over health care and taxes, means that metalworking facilities must really need the additional people to meet the increased demand. Two respondents said they “have never been busier” and “customers that have been silent for years need parts NOW.” For more on the MBI go here.