Finishing Index Jumps 9 Points to All-Time High

The Products Finishing Index rose 9 points during March to close at a new all-time high of 63.9.  The month’s gains were broad-based with all components registering expanding activity levels.  However, March’s gains were most strongly observed in supplier delivery and new orders activity, both of which registered all-time high readings. In a first of its kind, March’s new orders reading rose 15 points in a single month.

The current supplier delivery reading in excess of 78 is roughly 13 points higher than the pre-COVID peak reading of nearly 65.  However, this 13-point spread represents as much as a 90% increase in the number of survey respondents who reported slowing supply chain conditions in March as compared to the prior peak!  Strong new orders activity coupled with slowing supply chains through the first quarter of 2021 has resulted in several other observations.  The first of these is lagging production which has failed to keep up with the latest surge in new orders activity.  The second is the recent transition in backlog activity in which the fourth quarter of 2020 was modestly contracting before it began to aggressively expand starting in January.
 

Products Finishing Index