With a reading of 53.7, Gardner Business Media’s May metalworking index showed that the industry continues to grow at a fast pace. The index was higher than 53.0 in each of the first five months of 2014, and the industry grew seven of the last eight months. The May index also was 10 percent higher than it was one year earlier, the third month in a row that it grew by at least that much. Annually, the industry has grown at an accelerating rate the last three months.
New orders increased for the eighth month in a row. During this time, the rate of increase in new orders has steadily accelerated. Production also has expanded for eight months; however, its rate of growth slowed somewhat in April and May. Backlogs contracted at a very moderate rate for the second month in a row, but compared to one year earlier, they are increasing at a rapid rate. The annual rate of change in backlogs continues to accelerate, which is a positive sign for future capacity utilization levels and capital spending. Employment has expanded since last October, in May growing at its fastest rate since June 2012. Exports contracted for the second straight month, while supplier deliveries continued to lengthen at a rate similar to that seen since last November.
Material prices have been increasing at their fastest rate since February 2013. After contracting in April, prices received by metalworkers increased in May at the second fastest rate since January 2013. Future business expectations improved in the month, almost reaching their highest level since early 2012.
Future capital spending plans have increased the last three months compared to one year earlier. In May, future spending plans increased 10.4 percent, the second month in a row of more than 10.0 percent growth. The annual rate of change accelerated for the second month in a row, reaching its fastest rate of growth since January.