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52 SEPTEMBER 2017 — PFonline.com MICHAEL GUCKES Senior Economist Gardner Business Intelligence gardnerweb.com/economics/blog GARDNER BUSINESS INDEX: FINISHING Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17 Jul 17 The Products Finishing Business Index fell slightly in July to 54.3, pulling down the year-to-date index average only slightly to 54.5. Compared to the three-month average from one year earlier, the index is up more than 15 percent, and compared to the single month of July 2016, the index is up 22 percent. The July 2017 index was supported by strength in production, employment and supplier deliveries, but pulled down by new orders, backlogs and exports. New order readings during the first half of the year averaged 57.7, representing a record-breaking six-month period for new orders since 2013. July's reading of 52.9 was down more than 8 percent from June, but by still up 6.6 percent from the same month one year earlier. Production Finishing Sustains Elevated Readings At 54.3, the finishing industry keeps its high 2017 readings, buoyed by strength in production, employment and supplier deliveries. remained unchanged from June at 59.9, only slightly below the record high of 62.1 set in January. Average production readings in the year-to-date period have been much higher than in the past two years and are comparable to the highs last set in 2014. The spread between new orders and production was very small through May but grew signifi- cantly in June and July. Typically, a significant spread between new orders and production implies a change in backlogs has occurred or is about to occur. The July backlog reading increased by approximately 2 percent to 52.9. The Gardner Business Intelligence team will be closely moni- toring the backlog reading in the coming months, as it is considered a bell- wether to capacity utilization and, ulti- mately, machine tool sales. The spread between the readings for material prices and prices received narrowed greatly in July after a much smaller narrowing in June. Material prices fell by nearly 11 percent in the month, while the reading for prices received increased by more than 3 percent to 55.6, breaking the previous high of 54.6 set in January 2014. The Products Finishing Business Index is compiled by the team at Gardner Business Intelligence (GBI), a division of Gardner Business Media, which also produces this and other publications covering the finishing, metalworking, plastics and compos- ites, and automotive industries. This index utilizes data from surveys sent monthly to several hundred finishing shops in North America and analyzed by the GBI staff. For information about GBI and to read more business intelligence, please visit short.pfonline.com/research. Material prices fell nearly 11 percent, while prices received increased more than 3 percent. 70 65 60 55 50 45 40 35 30 70 65 60 55 50 45 40 35 30 Jan 13 Jul 13 Jan 14 Jul 14 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17 Jul 17 Prices Received vs. Material Costs Prices Received Material Costs Finishing Business Index