Total Business Activity Expands Modestly Led By Production

The Finishing Index registered modest business activity, closing the month at 51.5. The latest Index reading is 13% lower compared to the same month one year ago, indicating slowing growth within the industry over the past year. Index readings above 50 indicate expanding business activity, while a value of 50 indicates no change and a reading below 50 indicates contracting business activity. The latest Index reading was led higher by strength in production activity followed by supplier deliveries, new orders and employment. The Index — calculated as an average of its components — was pulled lower by a contraction in exports and backlog activity.

Since the fourth quarter of 2018, several of the most important business activity indicators have trended upward, including production, supplier deliveries and new orders. The modest rebound in these business indicators have been offset by the ongoing weakness in exports and a more recent contraction in backlogs. Despite the weakness of export orders since mid-2018, total new orders have continued to expand, suggesting that domestic demand for finished products has more than offset lost foreign demand.