With a reading of 50.7, the Gardner Business Index showed that the moldmaking industry expanded in March for the first time since March 2015. The index has improved sharply for two months.
The main reasons for the improvement in the month were new orders, production and employment. New orders increased for the first time since last June, and production increased for just the second time since July. The backlog index was essentially unchanged in March, but remained at a level significantly higher than at any time since May 2015. After three months of contraction, employment increased in March, reaching its highest level since June 2014. Because of the strong dollar, exports continued to contract in the month, although the rate of contraction has been somewhat slower for two months. Supplier deliveries shortened for the third time in four months, indicating slack in the supply chain.
The material prices index increased in March for the second month in a row, however the rate of increase was still one of the lowest recorded since the survey began in December 2011. Prices received decreased for the sixth month in a row, while future business expectations improved for the second month in a row, although they have remained at a relatively low level for the last two years.
Companies with more than 250 employees expanded at an accelerating rate for the second month in a row, and plants with 100-249 employees expanded once again after contracting the previous two months. Facilities with 50-99 employees grew at a very strong rate for the fourth month in a row, and companies with 20-49 employees grew for the third month in a row. Companies with fewer than 20 employees continued to contract, but their subindex was at its highest level since May 2015.
Custom processors expanded for the first time since last June, while metalcutting job shops contracted for the 10th time in 11 months.
Three of the five regions of the country expanded in March. The North Central-West grew at the fastest rate and expanded for the first time since last May. The Southeast grew for the fifth consecutive month, and the South Central expanded for the first time since January 2015. Meanwhile, the North Central-East contracted at a very moderate rate and was followed by the Northeast and West regions.
Compared with one year earlier, future capital spending plans contracted almost 17 percent in March after growing the previous three months. Despite this contraction, however, capital spending plans have improved significantly since December. As a result, the annual rate of change has contracted at a decelerating for four straight months.