Finishing Growth Slows Entering 2Q
Most components of the Finishing Index saw slower growth in April, with only one contracting.
The Finishing Index slowed during April after setting a record high the prior month. All components of the index registered lower readings, however, most remained at the upper end of their historic ranges.
The spread between production and new orders widened in April, as new orders growth slowed relatively more. As a result of this change in new orders volumes, finishers may have been able to tackle more of their backlog orders, explaining the significantly lower backlog reading in April.
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Registering 58.0, the Gardner Business Index (GBI): Finishing cooled in April after reaching an all-time high the prior month. Yet, April’s result was still the third highest in recorded history and was significantly higher than readings in previous years. The index stands at 12.1 percent higher than it was in the same month one year earlier.
Data is derived from a monthly survey of finishing shop owners and managers by Gardner Intelligence. Our review of the underlying data for the month of April reveals that production, new orders, supplier deliveries and employment lifted the index higher, while it was pulled down by backlogs, which slowed sharply, and exports, which posted a contractionary reading after two prior months of expansionary readings.
Every component of the Finishing Index registered a lower reading during the month, with backlogs experiencing the largest one-month downward change. However, except for the exports reading, those lower readings only indicate that growth slowed rather than actually contracted. The increased gap between readings for production and new orders may in part explain the considerable downward change in the backlogs reading, which saw growth slow sharply. Lastly, the employment reading, which fell only slightly, continues to indicate that finishers are struggling to find enough laborers.
