Easing supply chain constraints may open production flow
Inflated supplier delivery readings have made a significant decline in November, pointing to a slow, if not steady, improvement in the supply chain.
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Composites Fabricating Index: The Composites Fabricating Index ended November at 60.1. A notable decline in the supplier delivery reading was the primary driver of the month’s change.
The Gardner Business Index (GBI): Composites Fabricating fell a modest one point in November to end at 60.1. Of the six measures which constitute the Index, only the supplier delivery reading indicated a significant change, falling nearly six points. For the first time since January, production activity registered at or above the same month reading for new orders activity, closing the longest lasting “production deficit” in the 10-year history of the Composites Index. Moreover, despite the month’s accelerating expansion in production activity, November’s backlog activity reading increased by ½ of a point, setting a five-month high.
Supply chain performance improves: Crippled supply chains since the pandemic have resulted in inflated supplier delivery readings (rising readings indicate worsening supply chain performance). November’s one-month supplier delivery reading decline was the largest since May 2020.
A significant decline in the supplier delivery reading is welcomed news for the industry, which, in the present environment, points to improving supply chain performance; in fact, the latest reading marks a recent low for the measure, even though it is nearly 15 points above the pre-pandemic record high. Should supply chain conditions continue to improve, the industry can expect a further fall in supplier delivery readings, as well as a potential increase in those for production and employment, as materials become more available to fabricators.
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