November MBI Growth Remains Steady

With a reading of 51.3, Gardner’s Metalworking Business Index (MBI) showed that the industry grew in November for the 11th consecutive month and the 13th time in 14 months, at a rate slightly faster than October. The month-over-month rate of growth was just 2.0 percent, which was the second slowest rate of growth since August 2013, and the annual rate of growth decelerated for the second month in a row.

Both new orders and production increased for the 14th month in a row, although new orders grew at their second slowest rate since September 2013 while production grew a little faster than it has since July. Backlogs contracted at their fastest rate since December 2013, and compared to the same month one year earlier, they contracted for the second month in a row. While it was still growing quickly, the annual rate of growth has decelerated for three months in a row, indicating that capacity utilization will likely see its peak rate of growth in the first or second quarter of 2015. Employment has continued to expand since August, and the rate of contraction in exports slowed significantly in November, although the dollar continues to appreciate against other world currencies. Supplier deliveries continued to lengthen, but the rate of increase has slowed the last three months.

Material prices have increased at a slower rate since June and were at their slowest rate since December 2013. Prices received have increased the last seven months, although the increase has accelerated the last two months. This is the strongest period of sustained price increases by metalworking facilities since the summer of 2012. Future business expectations increased sharply in November and were at their highest level since May.

Future capital spending plans contracted 13.7 percent from a year earlier, the fastest month-over-month contraction since February. The annual rate of growth decelerated to 0.5 percent. 

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