By The Numbers: Finishing Business Index at 52.0

At 52.0, the Finishing Business Index showed that the finishing industry grew for the seventh consecutive month, although July recorded the slowest rate of growth during that period. Nevertheless, the one-month rate of change continued to show growth; it was 5.6 percent in July, which made the 11th consecutive month of growth. The annual rate of change has grown at an accelerating rate for five straight months.

In July, every sub-index contributed to the slower rate of growth. New orders increased for the seventh month, but the index has trended down since March. Production also has expanded for seven months, but the index has dropped significantly the last two months. Backlogs contracted for the second time in three months yet continued to increase from where they were one year ago. This continues to be a positive sign for future capacity utilization and increased capital equipment investment. Employment has expanded every month in 2014, but July showed the slowest rate of expansion. Exports contracted after growing three of the previous four months. Supplier deliveries lengthened at nearly the fastest rate since the summer of 2012.

The rate of increase in material prices also slowed in July, but prices were still increasing at near record levels since the survey began in December 2011. Fortunately, prices received were increasing at virtually the fastest rate since the late spring of 2012. However, material prices were increasing much faster than prices received. Future business expectations were still comfortably above the historical average; they have been fairly consistent throughout 2014.

Finishing facilities with more than 250 employees continued to grow at a very strong rate. Their index has been at least 57.5 every month in 2014. Finishers with 20-49 employees were also performing quite well. They grew at their second fastest rate since May 2012. Facilities with 100-249 employees continued to grow, but they did so at a noticeably slower rate in July. After very strong growth five of the last six months, facilities with 50-99 employees contracted at a pretty fast rate. Conditions at the smallest facilities, those with 19 employees of less, have contracted at an accelerating rate the last three months. In July, they were contracting at their fastest rate since August 2013.

The South Central region grew at the fastest rate by far in July with an index of 66.1. The North Central – West was the next fastest growing region, which recorded an index of just 52.3. The North Central – East and the Northeast had minimal growth. Both the West and Southeast contracted.

Future capital plans fell below $1 million for the first time in three months and reached their second lowest level since August 2013. The one-month rate of change contracted 7.6 percent, which is the first month of contraction since February. After one month of growth, the annual rate of change fell back into contraction.