By The Numbers: June Finishing Index at 55.1

With a reading of 55.1, the Gardner Business Index showed that the finishing industry grew for the sixth consecutive month. Since August 2013, the level of business activity in the finishing industry has been improving steadily. In June, the index was 15.5 percent higher than it was one year ago. This was the 10th consecutive month that the month-over-month rate of change grew. Also, it was the fastest rate of monthly growth since November 2013. Annually, the industry has grown at an accelerating rate the last four months.

New orders increased for the sixth month in a row. However, the rate of increase has decelerated since March. Production has followed the same pattern as new orders, but the rate of growth in production has not decelerated as fast as the rate of growth for new orders. Backlogs were flat after contracting slightly last month. However, backlogs increased 21.4 percent compared with one year ago. This is the fourth straight month of such growth. The annual rate of change has accelerated rapidly each of the last five months. This indicates higher capacity utilization levels and capital spending in the industry for the remainder of 2014. Employment continued to expand at a rapidly accelerating rate. The employment index is at its highest level since February 2012. Exports increased for the third time in four months. The export index has been trending up since September 2013. Supplier deliveries lengthened at a significantly faster rate in June.

Material prices have increased at a dramatically accelerating rate since March. The material prices index is at its highest level in the history of the index. Prices received have increased six of the last seven months. In June, prices received increased at a notably faster rate. Future business expectations have trended up since March and were near their peak level since early 2012.

Finishing facilities with more than 250 employees continued to see the strongest growth. Their index has been above 63.0 for three of the last four months. Plants with 20-249 employees saw strong growth in June compared with last month. Finishers with fewer than 20 employees haven’t fared as well. In each of the last two months they have contracted at an accelerating rate. And, they have not seen a single month of growth since August 2012.

The West region grew at the fastest rate in June. It was the fastest rate of growth for this region since April 2013. It was followed by the North Central – East, North Central – West, and Northeast regions.

Future capital plans were above $1,000,000 for the third straight month. Also, they reached their highest level since October 2012. Compared with one year ago, capital spending plans were up 16.1 percent in June. This is the fourth straight month of month-over-month growth. The annual rate of change grew for the first time since the index began.