By The Numbers: Third Straight Month of Growth

With a reading of 51.4, the Gardner Business Index showed that the finishing industry expanded for the third month in a row. The index has moved slightly lower in each of those three months. The industry has expanded in every month but three since January 2014. March was the first time since November 2014 that the index contracted compared with one year ago. But, year-over-year the industry has seen slower growth since September 2014.

New orders increased for the fourth month in a row. The index was at its second highest level since March 2014 and its third highest level since May 2012. Production grew for the third month in a row. The rate of growth has increased dramatically since December 2014, and the index was at its highest level since May 2012. These two indices are very important and indicate the industry should see faster growth over the next few months. Backlogs have contracted for nine straight months. The trend in backlogs indicated that the industry has seen its maximum capacity utilization in this cycle. Employment increased at an accelerating rate for the third straight month. Exports have contracted at an accelerating rate for three months. The rate of contraction was the fastest since December 2012. Supplier deliveries shortened for the first time since the survey began in December 2011.

Material prices were flat in March. This was the first time they did not increase since the survey began. The rate of increase in material prices has dramatically and steadily declined since June 2014. Prices received by finishers decreased for the second month in a row. Future business expectations improved significantly in March. The index was at its second highest level since March 2012. In only a few months over the last three plus years have expectations in the finishing industry been higher.

Plants with 50-99 employees have expanded for three straight months but the growth rate has decelerated each month. Facilities with 20-49 employees expanded for the first time since October 2014 and at their fastest rate since April 2014. Finishing shops with 19 or fewer employees contracted for the time since November 2014.

The West region was the fastest growing in March. It has expanded for two months in a row. The North Central–East region expanded for the second time in three months. The Northeast region grew for the second straight month, but the rate of growth in March was minimal. The North Central–West region had a modest contraction.

Future capital spending plans have taken a hard hit the last five months. The month-over-month rate of change has contracted more than 27 percent in each of those months. And, the month-over-month rate of change has contracted in seven of the last nine months. The annual rate of change has contracted at an accelerating rate for four straight months.