Overall Business Activity Held Mostly Steady

The Mold Business Index (MBI) for November 2009 is 50.0. This is a 4.2-point increase from the previous month’s value of 45.8, and it is a 7.5-point increase from the MBI value of 42.5 from November of last year. This month’s value indicates that overall business activity for North American moldmakers held mostly steady in recent weeks. There was a decline in the total number of New Orders, but there was a modest increase in both Employment and Production levels. The downward pressure on Mold Prices persisted in November, and Materials Prices were higher yet again. Future Expectations escalated to 69.4 in November.

As 2009 came to a close, the prevailing trends in the major economic and end-market indicators continued to support our forecast of gradual improvement. The data measuring activity levels in the cyclical industries of housing, autos, and manufacturing were all moderately higher in recent weeks. For 2009 as a whole, pending home sales were up about 20% from 2008 levels. Both new- and existing-home sales are forecast to increase over the next several months, supported by the recently extended and expanded federal homebuyer tax credit.

The pace for motor vehicle sales escalated in the fourth quarter to almost 11 million units on an annualized basis. This is well above the pace of 9.5 million units that prevailed over the first half of the year. Some of the strength in vehicle sales was due to fleet purchases, but vehicle sales to consumers still helped to lift total retail sales in the fourth quarter. Overall, retail sales increased by about 1% when compared with the previous quarter, and the GDP data from the last three months of 2009 should show that the growth rate in real (inflation-adjusted) spending advanced by 1.5% to 2% at an annual rate in the fourth quarter.

The deceleration that occurred in the ISM manufacturing (a.k.a. Purchasing Managers’) index as the year ended is not a cause for concern because the trend is still well above the breakeven level of 50.0. The current level is consistent with moderate growth in industrial production. The difference between the new orders and inventories components of this index—a reliable estimate for future production—expanded sharply in recent months. This gap supports the forecast for further increases in manufacturing production over the next few months.

November 2009
	% Positive	% Equal	% Negative	Net % Difference	Sub- Index
New Orders	33	17	50	-17	41.7
Production	39	33	28	11	55.6
Employment	28	55	17	11	55.6
Backlog	39	22	39	0	50.0
Export Orders	6	94	0	6	52.8
Supplier Deliveries	0	89	11	-11	44.4
Materials Prices	17	83	0	17	58.3
Mold Prices	11	56	33	-22	38.9
Future Expectations	50	39	11	39	69.4