With a reading of 51.1, the Gardner Business Index showed that the moldmaking industry expanded in August for the first time since March 2016 and just the second time since March 2015. In fact, the August index was at its highest point since February 2015. Since January of this year, the index has shown significant improvement in the industry.
The new orders subindex jumped substantially in the month, also reaching its highest level since February 2015. While there have been ups and downs over this year, new orders have trended up since October 2015. The same could be said of the production subindex. Since late in 2015, new orders generally have been stronger than production, therefore the backlog subindex has trended up since January of this year. While backlogs still showed contraction in August, the subindex was at its highest level since January 2015. Employment has grown since March, but it has grown at a slower rate every month since then. Exports continued to contract, but at the slowest rate since last August. Supplier deliveries lengthened for the second time in three months.
Material prices have increased since February at a rate similar to the second quarter of 2015, but that rate of increase is still well below that of 2013 and 2014. Prices received decreased at a slightly faster rate in August than in the previous three months. Future business expectations improved notably from July and have steadily improved since January, reaching their highest level in August since March 2015.
Custom processors, or injection molders that in some cases make their own molds, grew for the fifth time in six months. Their August index of 56.9 was the highest since November 2014. Metalcutting job shops, which are likely strictly moldmakers and not plastic processors, contracted for the 13th month in a row. Activity in the medical industry and other manufacturing has been quite strong since May.
Future capital spending plans have improved dramatically in recent months. Compared with one year earlier, those spending plans have increased in eight of the previous nine months. Since March, they have increased a minimum of 65 percent. As a result, the annual rate of change has grown at a rapidly accelerating rate in both July and August. This was a very positive sign for future capital spending plans.