Production Machining - Your access to the precision machining industrial buyer.
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MICHAEL GUCKES Senior Economist Gardner Business Intelligence gardner web.com/economics/blog July 2017 – 53.1 Gardner Business Intelligence: Production Machining Business Index Holding Steady Production Machining Index 58. Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 70 65 60 55 50 45 40 35 30 25 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17 Jul 17 70 65 60 55 50 45 40 35 30 Production Machining Employment Index 53.1 58.1 PRODUCTION MACHINING INDEX 24 PRODUCTION MACHINING :: SEPTEMBER 2017 T he Gardner Business Intelligence (GBI) Production Machining index registered 53.1 for July. is was down slightly from last month's reading and below the year-to-date average. e index is still more than 20 percent above its July value from one year ago. e index readings for employment and backlog were stronger while readings for supplier deliv- eries, production, new orders and exports were lower. e GBI team closely monitors the backlog reading as it is considered a bellwether to capacity usage and ultimately machine tool sales. e July backlog reading of 53.2 is marginally above the year- to-date average reading. Compared with July a year ago, the backlog reading has increased by almost 40 percent. Backlog fluctuations often are a result of changes in new orders and exports. Since the beginning of the year, the reading for new orders has decreased by 13 percent, ending July at 51.6, indicating that fewer respondents reported new order growth during July than June. In the trailing 12-month period, new orders have improved significantly with a July to July reading improvement of more than 20 percent. New order readings are in part driven by the dynamics of the export market, as exports constitute a portion of total new orders. e exports reading ended July at 46.5, indicating that more respondents cited decreasing exports in July than in June. Exports readings in the trailing 12 months have moved in a range between 44 and 50, with a higher number of respondents reporting decreasing exports than increasing exports. roughout 2017, GBI has heard from manufacturers about their concerns over finding qualified talent. Demand for skilled manufacturing laborers has grown significantly across the country as evident by the fact that the June unemployment rate in manufacturing at 3.4 percent was a full percentage point lower than the total civilian unemploy- ment rate at 4.4 percent. GBI's employment readings indicate that hiring among production machinists increased quickly during the last quarter of 2016 and the first quarter of 2017. In three of the first seven months of this year, our data recorded three employment readings that surpassed the record high reading set in 2014. Among reporting job shops within the Production Machining industry, respondents over the last 12 months have reported significantly growing material prices; concurrently, readings for prices received have been growing more tepidly. In the 12 months ending July 2017, the reading for material prices increased by almost 25 percent while the reading for prices received increased by less than 6 percent. For more information about the July PM index as well as past indexes, visit gardnerweb.com/economics/blog.