With a reading of 47.1, the Gardner Business Index showed that the moldmaking industry contracted in July for the fourth month in a row. Since May, the rate of contraction has accelerated slightly.
New orders contracted for the fourth month in a row, although this subindex improved for the first time since March. Production contracted for the second straight month, but its rate of contraction was minimal. The backlog subindex has contracted since November 2014, hovering since May 2015 around 40, which is quite low. Employment increased in July for the fifth month in a row, but the rate of increase has decelerated since this past March. Exports remained mired in contraction and have contracted at a relatively consistent rate for most of the last three years. Supplier deliveries shortened at a minimal rate in July for the fourth time in five months.
The material prices subindex increased for the sixth month in a row, however, the rate of increase was the slowest since February. Prices received decreased for the 10th month in a row, although this index was barely below 50 in June and July. Future business expectations declined noticeably in July, but the trend in expectations has been up since January.
Companies with more than 250 employees expanded for the fifth time in six months, and the rate of growth in those five months has been strong. Plants with 100-249 employees were flat in July after contracting the previous three months. Facilities with 50-99 employees have expanded for eight months in a row, although the rate of expansion slowed sharply in July. Companies with 20-49 workers expanded for the third time in four months, while companies with fewer than 20 employees continued to contract, although the rate of contraction was the slowest since March.
Custom processors expanded for the fourth time in five months, and July was easily the strongest month of growth among those four months. Meanwhile, metalcutting job shops contracted for the 14th time 15 months.
The West was the only geographic region to grow in July and has expanded at an accelerating rate the last two months. Ranked from slowest to fastest contractions, the other regions were the North Central-West, Northeast, North Central-East, Southeast and South Central. The Northeast and Southeast contracted after three and two months of growth, respectively.
Future capital spending plans were above average in July for the third time in four months. Compared with one year earlier, they increased in seven of the last eight months. In three of the last four months, spending plans have increased more than 100 percent, therefore the annual rate of change in future spending plans increased for the first time since December 2014.