Finishing Index Advances 4 Points as Components Approach ‘No-Change’ level
Improved readings among all components signal decelerating contraction. The Index has risen 13 points from its low in April.
The Gardner Business Index (GBI): Finishing added 4 points in June, raising the Index over 13 points since its April low. All components except supplier deliveries moved higher, approaching a reading of 50, which indicates no change from the prior month. This is important because it signals that a shrinking proportion of survey respondents are reporting worsening conditions while a growing proportion experienced no change — or even an improvement — in business activity in June. When Index readings exhibit such behavior, the industry is said to be experiencing a “slowing contraction” in business conditions.
For a second month, the supplier delivery component reading fell. By the nature of how this question is asked, quickening supplier deliveries lower the component’s reading. Quickening deliveries may provide the first evidence that upstream suppliers are moving toward more normal operations after experiencing significant disruptions in recent months. The resumption of supplier deliveries appears to be coming with higher prices as a growing proportion of finishers have now reported increasing material costs since April; however, for the first time since January, a majority proportion of finishers reported no change or an increase in the prices they were able to charge for their own products.
The Finishing Index is unique in its ability to measure business conditions specific to the finishing industry on a monthly basis. The challenges facing finishers today require leaders to have good data in order to make effective forward-looking decisions. It is thus particularly important at this time for our readers to complete the Index survey sent to them each month. Your participation will enable the best and most accurate reporting of the true impact that COVID-19 is having on the finishing industry along with the industry’s eventual recovery.
The Finishing Index added 4 points during June, inching it closer to the ‘50’ mark and indicating that the industry overall is experiencing what is called a slowing contraction.
Finishing Index Supported by an Improved Production Activity Reading in June
The production activity reading improved significantly in June as a growing proportion of surveyed finishers reported flat or growing production and backlog conditions.