St. Paul, MN (September 10, 2020) – The Gardner Business Index closed August at 50.7, marking its first expansionary reading since February 2020 and COVID’s initial disruption of the world economy, according to Steve Kline, Chief Data Officer.

Readings above a level of 50 indicate expanding business activity. The further above 50 a reading is the faster business activity is expanding compared to the prior month. 

Of the six components which constitute the Index, three reported expanding activity, these were led by supplier deliveries which was followed by production and new orders.  In a post-COVID first, production and new orders both reported their first month of expansionary activity.  As explained in our previous reports, COVID-period readings of supplier delivery activity have been abnormally high because of disruptions to supply chains as opposed to growing supply chain backlogs, thanks to strong economic growth.  Of the remaining components of the Index, employment activity reported almost no change compared to the prior month and was followed by exports and backlogs, both of which extended their slowing contraction trends.

COVID’s disruption to the economy has substantially elevated supplier delivery readings since February.  Removing the influence of supplier deliveries from the overall Index reading would lower the latest reading to 49.2 and mark the fourth consecutive month of rising Index readings below 50.  Rising readings that are below ‘50’ signal slowing contraction in business activity.

The overall rebound in manufacturing business activity has resulted in a growing number of end-markets reporting expanding business activity.  Among those are petrochemicals — one of the hardest-hit industries earlier in the year — which reported the greatest level of expansion during August.  It was followed by other expanding end-markets including plastic custom processing, automotive and metal form-fabrication.  Conversely, both the industrial motors and aerospace markets continue to report contracting activity.

By company size, firms of between 100 and 250 employees reported the fastest expansion in business activity during August followed distantly by firms over 250 employees in size.  Survey responses from smaller firms indicate that business conditions are less favorable.  Firms of between 20 and 49 employees reported nearly unchanged business conditions from the prior month while firms under 20 employees in size registered their 4th month of slowing contraction.  The last time that firms in this category reported expanding activity was June 2019.

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Matsuura Machinery USA, Inc., located in St. Paul, MN is the U.S. subsidiary of Matsuura Machinery Corporation in Japan. Matsuura, an innovator in the design, development and manufacture of high-precision manufacturing solutions for more than 80 years, has been the forerunner in designing pioneering technology and manufacturing solutions to a variety of industries around the globe. Matsuura Machinery USA, Inc. delivers unmatched excellence in 5-axis, vertical, horizontal, linear motor, multi-tasking CNC machine tools and machines with a powder bed metal AM platform with machining capability. Matsuura Machinery USA, Inc. provides the service, applications and technical field support that have always been the Matsuura standard for business.

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