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Michael Guckes

Michael has nearly 20 years of experience in forecasting and modeling using advanced statistical techniques. He has successfully applied his expertise at multi-billion dollar companies in the construction, banking and insurance fields. Michael received his BA in Economics and Political Science from Kenyon College and his MBA from The Ohio State University.

Posted by: Michael Guckes 23. January 2020

Metalworking Index Improves, Led by Supplier Deliveries

GBI Metalworking graph

The Gardner Business Index (GBI): Metalworking closed 2019 registering an improved reading of 48.2. Index readings above 50 indicate expanding activity while values below 50 indicate contracting activity.  The further away a reading is from 50, the greater the magnitude of change in business activity. The Index’s recent upward movement toward 50 indicates that business activity is contracting more slowly than in the prior month. Gardner Intelligence’s review of the underlying index components observed that the Index, which is calculated as an average of its components, was supported by an expansion in supplier deliveries. We saw no change in new orders and slightly contracting activity in exports, production and employment (although the contraction of those three components in January is less than December). Only backlogs prevented the Index from moving higher. Backlogs ended the year registering a sharp contractionary reading.

 

GBI: Metalworking – Backlogs (3MMA)
Backlog activity contracted faster than any other Index component during the second half of 2019. This was driven in part by the relatively faster contraction in exports and new orders activity as compared to production.

 

2019 was a year of transition for the Metalworking Index. The start of the year saw all components except exports continue their expansionary trends first observed in early 2017. Data collecting during the first quarter witnessed slowing growth in backlogs as new orders growth was outpaced by production gains. It was not until the second half of the 2019 that new orders activity abruptly slowed with July’s reading registering the first contraction in new orders since late 2016. The sharp transition in new order activity resulted in a steep contraction in backlogs, a trend that would be exacerbated throughout the remainder of 2019. 

Posted by: Michael Guckes 12. December 2019

Mild Metalworking Index Contracts, Led By Drop in Backlogs

GBI Metalworking

The Metalworking Index reported contracting activity among all components. Backlog activity contracted faster than all other components.

 

The Gardner Business Index (GBI): Metalworking data indicated an accelerating contraction in November as the Index moved lower to 47.0. Index readings above 50 indicate expanding activity while values below 50 indicate contracting activity. The further away a reading is from 50, the greater the magnitude of change in business activity. Gardner Intelligence’s review of the underlying index components observed that the Index, which is calculated as an average of its components, was supported by supplier deliveries, production, new orders, exports and employment. Only an accelerating contraction in backlogs pulled the Index lower.

November 2019 supplier deliveries (3MMA)

Supplier Deliveries (3MMA). In its history, the Metalworking Index has rarely experienced simultaneously contracting activity among all its components. In the history of the GBI, which dates back to late-2011, supplier deliveries has only contracted during seven of those months.

All components registered contractionary readings in November — an occurrence last experienced in the third quarter of 2015. At that time, the Metalworking Index was in the midst of a 21-month contractionary period that did not end until January 2017, marking the beginning of the most recent (and longest) manufacturing expansion since Gardner first began collecting data in late 2011.

During the third quarter of 2019, total new orders readings hovered around 50, indicating no change in total new orders activity while export readings reported contracting activity. The difference between the readings implied a potential mild expansion in domestic new orders. November’s near same readings for both measures suggest both are now contracting.

Posted by: Michael Guckes 10. July 2019

Production Expands the June 2019 Metalworking Index

The Gardner Business Index (GBI): Metalworking registered 51.8 in June, signaling marginally greater business activity compared to the prior month.

Index readings above 50 indicate expanding activity while values below 50 indicate contracting activity. The Index is calculated as an average of its components.

Gardner Intelligence’s review of these underlying components observed that the Index was supported by expanding activity in production, supplier deliveries and employment. The reading for new orders registered slightly below the average of the components. The Index was pulled down by the ongoing contraction in exports and backlogs.

Metalworking Business Index: The Metalworking Index was supported by production, supplier deliveries and employment. New orders activity fell slightly below the average reading of the six components which constitute the total index.

Data collected in June extended many of the trends observed in the data over the last six to 12 months. Supplier deliveries in 2019 have continued to closely track with production activity readings. This comes after supplier deliveries expanded far faster than any other component during the second half of 2018, as manufacturers rushed to fill new orders. Similar readings for both the supplier deliveries and production components in 2019 suggest that manufacturers have astutely moderated their inventory levels, thereby preventing a glut of inventory.

The gap between production and new orders activity has widened since the beginning of 2019. This gap has been made possible as shops have drawn down their inventory of backlog orders.

Exports registered their fastest rate of contraction since August 2016. A June increase in production activity coupled with a simultaneous slowdown in new orders growth contributed to another month of contracting backlogs.

Posted by: Michael Guckes 12. April 2019

Gardner Business Index: Metalworking Extends Its Consistent Growth Pattern

GBI Metalworking

March’s data extended the trends witnessed in prior months. Supplier deliveries, production, new orders and employment continue to expand at slowing rates while backlogs and exports contract.

 

The Gardner Business Index (GBI): Metalworking was unchanged from the prior month, sustaining a reading of 53.6 in March. The latest data extend the recent trend of slower growth readings first experienced in November. Readings above 50 indicate business activity expansion while readings below 50 indicate business activity contraction. The latest reading is 10.4 percent lower than it was in March 2018, when the Index was near its all-time high.

Gardner Intelligence’s review of the underlying data for the month observed that the Index, which is calculated as an average of its components, was supported by supplier deliveries, new orders, production and employment. Export and backlogs lowered the Index for the second consecutive month, with backlogs contracting faster than exports.

New orders rebounded from February, when the component registered its lowest reading since late 2016. This coupled with a fourth consecutive month of contracting exports resulted in a significant draw down in backlogs. For the month, the backlog component further contracted to its lowest reading in more than two years.

GBI Metalworking details

Exports have contracted in six of the last seven months, however, new orders readings (which represent total metalworking manufacturing orders activity) have expanded every month since October of 2016. This indicates that domestic orders through March have more than offset weak foreign orders.

 

Moving counter to the weakness in exports and backlogs, supplier deliveries and production continued to register business activity at levels reminiscent of those experienced earlier in the business cycle. Employment activity also expanded at levels consistent with those reported earlier in the current cycle. Strong employment readings often indicate a positive mid- to long-range outlook for the industry due to the time and resources required to find and train talent.

Posted by: Michael Guckes 11. January 2019

According to the Gardner Business Index, Metalworking Set a Two-Year Expansion Record

The Gardner Business Index (GBI): Metalworking registered 53.4 for December. Although December’s above-50 reading was slightly lower than the prior month, it was still a milestone for the Metalworking Index: It marked the first time in recorded history that the index has recorded two years of consecutive expansion. Furthermore, it established 2018 as the fastest expanding calendar year since 2012, with an average monthly reading of 57.7. (The prior record was set in 2017 with a reading of 55.8.) The index was supported by supplier deliveries, production, new orders and employment. Backlogs and exports contracted during the month, pulling the average-based index reading lower.

Among all components, supplier deliveries registered the fastest rate of expansion since April, suggesting that manufacturing supply chains were still reacting to the unprecedented expansion of new orders initiated during the first quarter of 2017. As recently as October, new orders readings registered above 60; however, most components in recent months signaled slowing growth.

Should the first quarter or first half of 2019 experience additional periods of slower growth in new orders and production, manufacturers will have to carefully monitor and adjust their input supply flows.

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