Production Machining

MAY 2018

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 Business Index Retains Elevated Status in March The Precision Machining Index reading of 59.5 for March capped off the best quarterly performance of the index since its inception. The index has been propelled higher since the fourth quarter of 2016 by production and new orders readings. Data for the first quarter of 2018 indicate that supplier deliveries are growing at record rates and well above their historical average. Despite significant increases in supplier deliveries, backlog levels throughout the quarter continued to climb higher. 60 50 40 PRECISION MACHINING INDEX 60 50 40 BACKLOG AND SUPPLIER DELIVERIES (3-month moving average) 1/13 7/13 1/14 7/14 1/15 7/15 1/16 7/16 1/17 7/17 1/13 7/13 1/14 7/14 1/15 7/15 1/16 7/16 1/17 7/17 59.5 n Supplier Deliveries n Backlog PMI Completes Best Quarterly Performance in History GARDNER BUSINESS INDEX: PRECISION MACHINING 24 PRODUCTION MACHINING :: MAY 2018 R egistering 59.5 for March, the Gardner Business Index (GBI): Precision Machining notched up its best quarterly performance in recorded history. Compared with the same month one year ago, the index increased by slightly under 2 percent; however, this is largely because of a spike reading from March 2017. Comparing first-quarter performance with the prior year, the Precision Machining Index (PMI) is more than 5 percent. Gardner Intelligence's review of the underlying data indicates that supplier deliveries, production, new orders and backlog all lifted the business index higher. e components, which lowered the index's average-based calculation, included employment and exports. Exports contracted (registered a reading below 50) for the first time since November 2017. e latest month's components readings indicate that aggressive increases in supplier deliveries starting at the beginning of the year have played a pertinent role in improving production rates and tackling surging new orders. Looking at the last 18 months of data, it is apparent that supplier deliveries were caught off guard when new orders jumped during the fourth quarter of 2016. roughout 2017, new orders continued to pressure job shops to increase production, and they did. However, suppliers needed several months to adapt to the upward shift in demand for manufactured goods. Stay ahead of the curve with Gardner Intelligence. More information about the Precision Machining Index can be found at

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