Modern Machine Shop

SEP 2018

Modern Machine Shop is focused on all aspects of metalworking technology - Providing the new product technologies; process solutions; supplier listings; business management; networking; and event information that companies need to be competitive.

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GARDNER BUSINESS INDEX MMS SEPTEMBER 2018 216 mmsonline.com A.C. Michael Guckes, MBA CHIEF ECONOMIST— GARDNER INTELLIGENCE mguckes@gardnerweb.com Supply-Chain Improvements Continue to Lead Growth Registering 55.6 for July, the Gardner Business Index (GBI): Metalworking continues to report readings well above average. Michael has performed economic analysis, modeling and forecasting work for nearly 20 years. Gardner Intelligence is a division of Gardner Business Media, publisher of this magazine. Gardner Intelligence data show that July was the fourth consecutive month of slowing growth after reaching an all-time high in February. However, June's reading of 57.5 was still exceptionally high when compared to the index's historical average reading of 51.0. The positive drivers of July's index were supplier deliveries and production. Readings for employment, new orders, backlog and exports lowered the index's average-based calculation. This is the third consecutive month in which new orders weighed down the overall index result. Strong expansion in supplier deliveries suggest that the metalworking supply chain continues to grow to handle the robust demand for products, while the slowing growth of new orders and production suggests that we are well along the growth side of the business cycle. However, regular backlog growth since February 2017 suggests that the industry should be well situated overall to handle temporary obstacles that would slow expansion. Supplier deliveries was the only component in July to move higher. All other components indicated slowing growth. The employment reading, which until this month had indicated expanding growth, fell sharply. Given the tight labor market, weakness in the employment reading may be more indicative of employers not being able to find new hires rather than weakening demand for labor. The leading indices for July were employment and supplier deliveries, the latter of which has experienced record growth. In response to recent growth, the supply chain seems to have adapted to higher volumes. PRESENTED BY Stay ahead of the curve with Gardner Intelligence. Visit Gardner Intelligence's blog at gardnerintelligence.com/blog . SUPPLIER DELIVERIES & EMPLOYMENT 3-MMA METALWORKING BUSINESS INDEX

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