The Power Transmission Distributors Association Business Index reading for the second quarter was 50.4, down slightly from the 1Q2016 reading of 50.9, indicating significant growth. The PTDA Business Index reading is lower than the June 2016 PMI Index of 52.6.
Distributors reported an index reading of 53.7, signaling expansion. However, this is still down from a 1Q2016 index of 56.9 and suggests pace of expansion is slowing. The employment reading of 51.1 signals increased hiring but is down from the 60.8 seen in the first quarter. Concerns about future growth or capacity needs may be driving this trend, which is weighing on the PTDA Distributor Index.
Distributor inventories and supplier deliveries are lower in 2Q16. These are positive signs that distributors are seeing increasing activity and, combined with positive new orders, points to a promising end to 2016 and a better year in 2017.
The index reading indicates the rate of change compared with the previous period. Readings above 50 indicate growth and below 50 indicate contraction. The further the index is above or below 50 suggests a faster or slower rate of change.
The entire 2Q2016 PTDA Business Index report can be found here. It includes distributor and manufacturer breakout data in addition to historical data. The PTDA Business Index is modeled after the widely respected Purchasing Managers Index and tracks change in business activity, new orders, employment, supplier deliveries, inventories, prices and backlog in the PT/MC industry to arrive at an overall index.
