Finishing Index Ends Third Month Near All-Time High

The Products Finishing Index ended May at 62.9. For a third month this year, the Index has held near its all-time high of 63.9 set in March. May’s reading was supported by a seventh consecutive month of accelerating activity readings for supplier deliveries. Supplier delivery readings increase as the proportion of finishers reporting lengthening order-to-fulfillment times rises. May’s reading marks the sixth consecutive month in which the supplier delivery reading set a new all-time high. The latest reading at nearly 19-points above the pre-pandemic high helps give a sense for the unprecedented magnitude of the challenges facing the industry’s supply chains.

The effects of the industry’s supply chain challenges are rippling through other areas of business activity. Most noticeable of all has been the consistent spread between new orders and production activity during the year-to-date period which has sent backlog activity to all-time highs. In the history of the Index dating back to early 2011, new orders activity has never exceeded production activity for five consecutive months. In the history of the Index, it is more often the situation that production readings exceed those of new orders.

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Products Finishing Index

The Products Finishing Index registered the third month in record-high territory, thanks to accelerating activity in supplier deliveries, new orders and backlogs.

Supply Chain Challenges Taking a Worsening Toll on Production

The last 14-months have seen supply chain challenges only worsen. This is taking a growing toll on the ability of finisher to keep production at the levels necessitated by demand.