Finishing Index Reaches a Two-Year High in September

The Gardner Business Index (GBI): Finishing moved higher in September to close at 53.1, marking a two-year high. Readings above 50 signal an expansion in economic activity compared to the prior month; the higher a reading is above 50, the greater the proportion of respondents reported increasing business activity. The latest reading therefore contained the highest proportion of finishers reporting month-to-month improving conditions since late 2018. New-order activity led the Index for a second month, with production gains following closely behind. September’s employment activity moved back into contractionary levels, but this was more than offset by an 8-point move in backlog activity, which marked its first expansionary reading since 2018.

September’s impressive new-orders activity reading — the one-month reading was in excess of 58 — represents one of the strongest turnarounds in demand among the many manufacturing disciplines Gardner Intelligence tracks. As history has proven, new-orders directionally lead activity in most of the Index’s other components. That said, the ongoing disruption to the finishing industry’s supply chain could hinder this expansion moving forward. Supplier delivery readings continue at highly elevated levels, signaling that finishers are not receiving inputs at the desired quantity or frequency. It will take a combination of both improving demand and upstream supplies getting to finishers at desired levels for the industry to see continued expansion in the closing months of 2020.

Finishing Index