With a reading of 48.5, the Gardner Business Index showed that, although the moldmaking industry contracted in February for the ninth month in a row, it has spiked to its highest level since May 2015, the last month that the industry did not contract.
New orders were unchanged after contracting since June 2015, representing a substantial jump in the index. Production contracted for the third month in a row after just one month of expansion in November. Therefore, while the backlog index continued to contract, it made a significant jump in February to its highest level since March 2015, as new orders were much stronger than production. Employment contracted for the third month in a row. Because of the strong dollar, exports continued to contract, although the rate of contraction slowed in February. Supplier deliveries lengthened at their fastest rate since May 2015.
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The material prices index increased for the first time since July 2015, although the rate of increase was still one of the lowest since the survey began in December 2011. Prices received contracted for the fifth month in a row. Future business expectations improved slightly from January but remained near the lowest level of the last two years.
Companies with more than 250 employees expanded at their fastest rate since October 2015, while plants with 100-249 employees contracted for the second month in a row and the fourth time in six months. Facilities with 50-99 employees grew for the third month in a row, and those with 20-49 employees grew for the second month in a row and at their fastest rate since February 2014. Companies with fewer than 20 employees continued to contract but posted an index above 40 for just the second time in the last five months.
Custom processors contracted for the eighth month in a row, although this subindex has improved the first two months of this year. Meanwhile, metalcutting job shops contracted for the ninth time in 10 months, although the February index was the highest since September 2015.
The Southeast expanded at the fastest rate for the fourth month in a row, and the North Central-East also grew in February. The South Central was flat, not contracting for the first time since May 2015, while the West, Northeast and North Central-West all contracted.
Future capital spending plans were slightly below average in February, however, compared with one year earlier, they increased for the third month in a row. The annual rate of change contracted at a decelerating for the third month in a row, indicating that the trend in capital spending plans clearly is improving.