GBI: Finishing for April 2016—44.5

Future capital spending plans at highest level since October 2014.

With a reading of 44.5, the Gardner Business Index showed that the finishing industry contracted for the 10th consecutive month at its fastest rate since October 2015.

However, future capital spending plans reached their highest level since October 2014. Compared with one year ago, spending plans increased 16 percent in April, which was the fourth time in six months they increased. This is a clear sign that the industry is entering its next capital equipment expansion.

New orders contracted for the 10th month in a row, and April saw new orders contract at the fastest rate in 2016. The production index contracted at its fastest rate since November 2012. Since October 2015, the backlog index had contracted at a decelerating rate, however, that trend was broken in April as the backlog index contracted at its fastest rate of 2016. Employment contracted at its fastest rate since the survey began in December 2011. Exports continued to contract at a faster rate than the previous two months while supplier deliveries lengthened for the second month in a row.

Material prices increased at an accelerating rate for the second month in a row, accelerating the fastest since May 2015. Prices received increased for the third month in a row. While future business expectations has improved steadily over the previous months, the index declined significantly in April to the level of the end of 2015.

All plant sizes contracted in April. Plants with more than 250 employees contracted for the second time in three months. Facilities with 100–249 employees contracted for the third month in a row. Companies with 50–99 employees contracted for the third time in four months. Finishers with 20–49 employees contracted for the first time since January. Finishers with fewer than 20 employees continued to contract.

The Northeast was the fastest growing region in April. It expanded for the second month in a row. The Southeast also grew, expanding for four straight months. The North Central-East, North Central-West, West and South Central all contracted. The West and South Central have an index below 40 in April.

Originally published in June 2016.

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