With a reading of 47.6, the Gardner Business Index showed that the moldmaking industry contracted in June for the third month in a row. The rate of contraction has been relatively constant during that three-month period.
New orders contracted for the third month in a row with that subindex falling to its lowest level since January. Production also contracted for the first time since February, and the backlog index contracted at an accelerating rate for the third month in a row. Overall, backlogs have contracted since November 2014, however, in June that subindex was at its third highest level since April 2015. Employment increased for the fourth month in a row, and in these four months, the rate of increase was virtually the fastest since June 2014. Despite a moderation in the value of the dollar, exports remained mired in contraction, and after three months of minimal shortening, supplier deliveries lengthened at their fastest rate since May 2015.
The material prices subindex increased for the fifth month in a row, hitting their fastest rate of increase since November 2014. Prices received decreased for the ninth month in a row, but June showed the slowest rate of decrease of any of those months. Future business expectations improved in the month, reaching their highest level since March 2015.
Companies with more than 250 employees recorded a minimal contraction after four months of very strong growth, while plants with 100-249 employees contracted for the fifth time in six months. Facilities with 50-99 employees grew at a very strong rate for the seventh month in a row, and companies with 20-49 expanded for the fourth time in six months. Companies with fewer than 20 employees continued to contract, however, recording their lowest index since January.
Custom processors contracted for the first time since February, while metalcutting job shops contracted for the 13th time 14 months.
The Northeast was the fastest growing geographical region in June, growing for the third month in a row and with an index above 53.0 in each month. Also growing were the Southeast, which has expanded seven of the last eight months, and the West. The North Central-East and North Central-West contracted at rates similar to previous months, while the South Central collapsed.
Future capital spending plans fell back below average in June, although they were up 68 percent from one year earlier. This was the third straight month of month-over-month growth. In fact, the recent three months of growth has been so strong that the annual rate of change has decelerated to -2.7 percent in June from -51.1 percent in November 2015.