Business levels for North American moldmakers remain low, but it is increasingly apparent that the industry has turned the corner and has now entered an expansionary phase. The recovery will be slow and gradual for the remainder of 2009, and not all regions and end markets will participate at the same rate. But demand for new molds will gather momentum in 2010 and 2011.
We stick by our forecast that the U.S. manufacturing sector will rebound from double-digit percentage declines in each of the past three quarters, and will register a 3 percent increase in the third quarter of 2009. This expansion will be spurred by a rise in auto production. The increase in manufacturing will broaden in the coming quarters as demand gradually improves and firms bring production into line with sales. Manufacturers are still cautious, but government policy has stabilized consumption and improved financial markets, at least in the short-term.
This MBI is the highest monthly value in over four years. It represents a 9.0-point increase from the July value of 47.5, and a 6.0-point increase from August 2008. All of the measures of business activity were stronger when compared with the previous month except for a small drop in Export Orders. The steady downward pressure on Mold Prices moderated in August, while Materials Prices held steady. Future Expectations catapulted to 75.0 in August.
The sub-index for New Orders of molds is 61.1 for August. Gains in the total MBI depend on steady increases in new orders of molds. Production activity also jumped, as the latest Production sub-index is 63.9. The Employment component is 66.7 indicating that there was a solid increase. The Backlog component is 55.6 in August, which is about as positive as it ever gets for this particular sub-index.