LEARNMORE

 Shop & Business Management Zone

GETMOREINFO

For more information from Mountaintop Economics &
Research, Inc.

MMTTOOLS

 Print This Article

Ten years of historical data indicate that the mold industry typically slows down a bit in January, and this year was no different. The seasonal downturn pushed our MBI down to 46.0 in the latest month. This is a 6.1 percentage point decrease from the previous month’s value of 52.1. With the interesting exception of Export Orders, other components that comprise the MBI were lower when compared with the previous month. Unfortunately, Materials Prices increased again, and Future Expectations slipped to 57.1 in January.

Yet despite the seasonal weakness for moldmakers, the overall U.S. economy is exhibited signs of unexpected strength as 2007 got underway. There are still concerns stemming from the problems of the Big 3 automakers, the decline in residential construction levels and concerns about the war in Iraq. But energy prices are falling, and the U.S. GDP continues to expand at a solid pace. Important leading macro-economic indicators like the trends in the equity markets suggest that the worst is over and stronger economic growth is just a few months away.

The number of export orders for molds enjoyed an unusual, but welcome increase in the latest month. This
corresponds with stronger export demand for many types of U.S.-made products. Chart courtesy of Mountaintop Economics & Research, Inc.

Our forecast calls for widespread improvement in manufacturing and moldmaking in the second half of 2007. Global demand for molded products is expanding, and the Fed will begin to cut interest rates by this summer. All of these factors will promote increased capital investment for new injection molding machines and tooling in the second half of this year.

The Mold Prices sub-index for the latest month was 47.6. This means that the prices received for new molds were mostly steady last month. The prices paid for materials increased again, as the latest sub-index was 61.9. Supplier Delivery Times were a bit longer, at a value of 42.9 in January. There was a noticeable increase in the number of offshore orders for new molds, as the Export Orders sub-index was 54.8.

After a decline of 3 percent in 2006, our Injection Molding Business Index will post a solid gain of 5 percent in 2007. Consistent gains in the MBI depend on sustained growth of 4 to 5 percent in the output of injection molded products.