Modern Machine Shop

JAN 2017

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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144 MMS January 2017 mmsonline.com GARDNER BUSINESS INDEX Metalworking W ith a reading of 49.7, the Gardner Business Index showed that the metalworking indus- try in November was virtually unchanged from the previous month but reached its highest level since June 2015 (discounting a spike last March). The industry has clearly improved from the 43.2 read- ing it posted one year earlier, in November 2015. New orders grew for just the third time since July 2015, while production increased for the third time in four months. Backlogs continued to contract, but reached their highest level since last March and second highest level since June 2015. The trend in backlogs shows that capacity utilization should begin improving very soon. Employment was essentially flat in November after one month of minimal growth. Exports continued their long run of contraction; however, their subindex reached its highest level since May 2015 and clearly has trended up since August 2015. Supplier deliveries have lengthened since last March. While material prices continued to increase at a significant rate in the month, the rate of increase has decelerated since last June. Prices received continued to decrease, and while they trended up from November 2015 to August 2016, they have decreased at an accel- erating rate the three m o n t h s s i n c e t h e n . Future business expec- tations skyrocketed in November, jumping more than 12 points to 77.4, the highest level for this subindex since January 2012. Given the proxim- ity of the surveying to the presidential election, it would seem reasonable to conclude that the met- alwork ing industr y is bullish on President-elect Donald Trump. The aerospace indus- tr y grew in November after two months of contraction, jumping to its second highest level since the survey began in December 2011. Machinery/equipment also grew for the fourth time in five months, and the primary metals industry grew at an accelerating rate for the third month in a row. In fact, the primary metal subindex has improved dramatically from its levels in February through July. This is a positive sign for the metalworking industry overall, since primary metals companies create the stock that eventually gets machined. Also, the job shops segment increased for the second time in three months, reaching its highest level since February 2015. November 2016 – 49.7 STEVEN R. KLINE, JR. DIRECTOR OF MARKET INTELLIGENCE GARDNER BUSINESS MEDIA INC. Visit Steven's blog at gardnerweb.com/ economics/blog or email him at skline2@gardnerweb.com. Industry shows clear improvment from where it was a year earlier. 100 90 80 70 60 50 40 30 20 10 0 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Metalworking Business Index

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