Finishing Index Sets Two-Year Duration Record

The Finishing Index registered 51.0 for December, suggesting only a slight expansion from the prior month. Compared to the same month one year ago the Index has fallen 6.8 percent. However, all readings above 50 indicate expansion while higher readings represent faster growth. The latest reading was supported by supplier deliveries, production, employment and new orders. The components which pulled the index lower — calculated as an average of the components — included backlogs and exports.    

Supplier deliveries delivered another month of leading growth for the industry, signifying that the supply chains serving the finishing industry are continuing to expand to meet heightened levels which peaked most recently during the first quarter of 2018. Supply chain readings typically shadow the movements of new orders and production readings. The latest data reported a faster expansion in production than new orders while exports simultaneously contracted. The confluence of these conditions, in part, explain why backlogs contracted at a rate not experienced since mid-2017. In a bright spot for the industry, employment growth resumed after contracting in November for the first time in nearly two years. Firms often increase employment when long-term outlooks are expected to be positive.