Finishing Index's Growth Streak Continues in New Year
The Gardner Business Index: Finishing posted a record reading of 56.8 for January.
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All components of the Finishing Index with the exception of exports grew in January. Strong production and new orders results pushed the index to a new multi-year high in the month.
Expansion in new orders exceeded the growth of production for most of and since the fourth quarter of 2017. The result has been a strong increase in reported backlogs. All of these developments have come despite weakness in export demand.
The Gardner Business Index: Finishing began 2018 by registering a multi-year-high reading of 56.8 for January, a high not experienced since 2012. This latest reading is well above that of both the prior month and the 2017 average of 54.0. The index is up approximately 4.1 percent from January 2017.
Data is derived from a monthly survey of finishing shop owners and managers. Gardner Intelligence’s review of the underlying data for January indicates that new orders, production, and employment lifted the index higher, while supplier deliveries, backlogs and exports pulled the index lower. The exports reading was the only component of the index to contract during the month.
For the third time in four months, new orders growth exceeded production expansion. Historical data indicates that when this happens, the industry can expect prolonged future growth. The faster expansion of new orders as compared to production often has an immediate positive impact on the readings of either or both backlogs and exports. In the current situation, backlog figures have increased sharply to levels last seen in 2012.
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