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Mold Industry Bending, But Not Breaking
Oct 18, 2008

Total Mold Business Index for August 2008
The total Mold Business Index is a weighted average of the sub-indices for new orders, production, employees, backlog, exports and supplier deliveries.

The latest data from our Mold Business Index (MBI) survey indicates that the mold industry, like the U.S. economy at large, is bending, but not breaking.

Most indicators of business activity continue to perform better than in previous downturns, and the latest data suggest that overall conditions are stabilizing. Economic growth will be slow for the remainder of the year, but the underlying fundamentals should gradually improve as we head into 2009.

North American moldmakers found its footing over the summer

After a sharp decline in the spring, the business level for North American moldmakers found its footing over the summer and has held mostly steady in recent months. Demand for new molds is not expected to rise during the rest of 2008, but gains are expected for 2009. Chart courtesy of Mountaintop Economics & Research, Inc.

The MBI for August is 50.5. This is a 3.0-percentage point increase from the July value of 47.5. The New Orders component posted a gratifying gain, while steady readings were reported in most of the other sub-indices.

The persistent rise in the cost of steel kept the Materials Prices component elevated, but it did slide down from its recent peak, which suggests that prices are starting to level off. The Materials Prices sub-index is not included in the overall calculation of our MBI, so the sharp increase in the prices of steel and resins in recent months does not push the Index value higher and is not interpreted as positive news. The Future Expectations component eased back a bit to a still-optimistic 67.6.

The sub-index for New Orders of molds was 58.8 in August, indicating that new business levels were moderately higher for the month. Production levels were unchanged, as the latest Production sub-index was 50.0. The Employment component was 52.9, which means that there was a small increase in overall payrolls last month. There was no reported change in the industry’s backlogs, as the Backlog component was 50.0 in August.

The Mold Prices sub-index for the latest month was 41.2. This was an improvement over last month, and it suggests that the prices received for new molds are declining much less rapidly than they did earlier this year.

Supplier Delivery Times were modestly slower, as this sub-index posted a value of 44.1. There was no significant change in the number of offshore orders for new molds, as the Export Orders sub-index was 47.1.

August 2008 %                         Positive %                        Equal%                         Negative Net % Difference Sub-                        Index New Orders 4135241758.8Production 294229050.0Employment 187012652.9Backlog 294229050.0Export Orders 0946-647.1Supplier Deliveries 67618-1244.1Materials Prices 415904170.6Mold Prices 08218-1841.2Future Expectations5917243567.6