Finishers Note Changing Supply Chain and Production Levels
Production and employment both register quickening activity.
#economics
The Gardner Business Index (GBI): Finishing increased for the third time in four months. All six components of the Index registered expanding activity during the month. The latest acceleration in overall activity came from accelerating expansion in production, employment and backlogs. November’s production reading was nearly 5-points higher from a month ago, marking the second-largest, one-month production reading increase this year. The month’s acceleration in production may have influenced the 4-point decline in backlog activity. Conversely, supplier delivery, new orders and backlog activity all registered slowing expansion.
November’s results reported the slowest expansion in supplier delivery activity since the first quarter of the year. Despite this, results throughout 2021 have remained well above pre-pandemic highs. In the current environment, a declining trend in supplier delivery readings could be a first sign that supply chain challenges will continue well into 2022; however, their intensity and scope may start to diminish. Declining readings from present lofty levels will only come as the proportion of survey respondents report either no change in month-to-month supply chain performance or even improving performance increases from very low present levels.
Products Finishing Index
The Products Finishing Index moved modestly higher thanks to accelerating production and employment activity.
Production and Employment Both Mark Recent Highs
Rising employment and production readings imply that finishers are increasing their throughput; this will help reduce the year’s earlier surge in backlog activity. (Chart data illustrated as 3-month moving averages.)
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