Production Machining

JAN 2019

Production Machining - Your access to the precision machining industrial buyer.

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MICHAEL GUCKES, MBA Chief Economist, Gardner Intelligence Michael has performed economic analysis, modeling and forecasting work for almost 20 years among a range of industries. Michael received his B.A. in political science and economics from Kenyon College and his MBA from The Ohio State University. mguckes@gardner Index Growth Slows on New Orders and Backlogs Dynamics see backlogs contract. 60 55 50 45 40 PRECISION MACHINING INDEX 70 60 50 40 30 PRECISION MACHINING NEW ORDERS AND PRODUCTION 1/13 7/13 1/14 7/14 1/15 7/15 1/16 7/16 1/17 7/17 1/18 7/18 1/13 7/13 1/14 7/14 1/15 7/15 1/16 7/16 1/17 7/17 1/18 7/18 1/19 Supplier deliveries, production and new orders continue to be the growth drivers behind the Precision Machining Index. The latest index readings suggest moderating growth compared with the unprecedented rate achieved earlier in 2018 Consecutive months of supplier deliveries expansions are indicative of the growth of the manufacturing supply chain over the last nine quarters. This growth may in part be responsible for recent contractionary backlog readings after history-breaking expansion. n Suppliers Deliveries n Backlog 53.5 GARDNER BUSINESS INDEX: PRECISION MACHINING 120 PRODUCTION MACHINING :: JANUARY 2019 R egistering 53.5 for November, the Gardner Business Index (GBI): Precision Machining Index moved lower as new orders grew relatively slower than supplier deliveries and production. Compared with the same month one year ago, the index decreased by 1.4 percent. Supplier deliveries continue to be the fastest expanding component among all index components since the end of the first quarter of 2018. In addition to supplier deliveries, Gardner Intelligence's review of all underlying compo- nents reveals that production followed by new orders strengthened the average-based index result for the month. In contrast, employment, backlog and exports brought the Index lower. In an unexpected move, exports reported its strongest expansion in a single month since May. As was witnessed previously in July and repeated in November's data, strong supplier deliveries and an expansion in production that was relatively stronger than that in new orders growth weakened backlogs, which fell by more than six points. is fall resulted in a contractionary backlog reading comparable with results not seen since late 2016. While recent readings for backlogs have waivered between mild expan- sion and contraction during the third and fourth quarters of the year, a significant part of this may be a result of the growth and expansion of production and supply chains in recent years. As the production and supply chain pipelines have grown during this time it would be natural for backlogs to contract. Stay ahead of the curve with Gardner Intelligence. More information about the Precision Machining Index can be found at

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