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Metalworking Industry Flattens

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13. February 2013

With a reading of 49.7, the MBI showed that business activity in the metalworking industry was virtually flat in January 2013 compared with December 2012, but the industry clearly has broken out of the downward trend it began last March. Every subindex contributed to the improvement in the overall index in January.

New orders made the biggest jump, moving to 52.6 from 41.9. Production nearly matched the improvement in new orders, increasing to 50.4 from 42.3. This is the first time these subindices have grown since June and August, respectively. Despite the growth in new orders, backlogs contracted for the 10th month, but this contraction was noticeably slower. Exports continue to contract as the dollar remains relatively strong compared with most world currencies. After two months of contraction, employment in the metalworking industry has grown the last two months. Supplier deliveries continued to lengthen at the same rate, indicating widespread strength in manufacturing industries.

While the overall index has contracted for seven months, performance has been split based on shop size. Facilities with fewer than 50 employees have been contracting for some time, while facilities with more than 50 employees have begun growing. The period of contraction has been the longest for facilities with fewer than 19 employees. Most regions of the country are still contracting, but the East North Central and the West North Central both started growing in January.

While the metalworking industry as a whole is still contracting, there are end markets that are growing, including aerospace (56.1); automotive (52.5); construction machinery (55.3); electronics (50.3); forming and fabricating (53.4), and pumps, valves and plumbing products (54.8).

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