Broad-based industry expansion limited by supply chain conditions

The Gardner Business Index (GBI): Composites Fabricating Index increased almost six points in October to close at 61.1. The month’s gains were broad based across every measure of the Index apart from supplier deliveries activity. Among the five components which reported quickening expansion, new orders activity led the way with a seven-point increase. This was closely followed by backlogs, production, employment and finally, export orders. October’s export orders reading marked one of the largest single-month increases in the component’s history, resulting in the highest export reading since April 2018.

Strongly expanding domestic and foreign orders activity for fabricated products in October resulted in total new orders activity expanding at a much quicker level than production. This exacerbated the industry’s “production deficit” situation, as measured by the spread between new orders and production activity readings. This widening spread influenced the month’s backlog activity reading which rose to a four-month high. Lastly, the duration of this deficit will likely trouble the industry for at least as long as supplier delivery readings continue to issue all-time high readings, consistent with the incredible disruption present in current supply chains.