With a reading of 52.4, the Gardner Business Index showed that the moldmaking industry grew in February for the fifth month in a row and at its fastest rate since last June, helped by strong car sales in recent months. Compared with February 2014, the index increased 2.9 percent. This was the second time in three months that the index increased compared with one year earlier. The annual rate of change grew at a faster rate for the first time since August.
New orders grew at a strong rate in the first two months of 2015, increasing in February for the fourth time in five months. The production index also expanded at a very strong rate for the second month in a row, virtually the fastest rate of expansion in production since last May. Backlogs, however, contracted for the third straight month. Compared with one year earlier, the February backlog index contracted 7.0 percent, the fastest month-over-month contraction in backlogs since September 2013. The annual rate of change in backlogs continued to grow at a slower rate, indicating that the growth in capacity utilization will peak very soon. Employment was unchanged in February and has been floating around 50.0 for five months. Exports were flat despite the rapidly strengthening dollar. Supplier deliveries lengthened at their fastest rate since March 2012.
Material prices decreased in February for the first time since the index began in December 2011. Since last October, the material prices index has plummeted. Prices received contracted at a very moderate rate for the second month in a row, while future business expectations moved lower for the second straight month. They were still above the levels of the second half of 2014, however.
Plants with 20-49 employees expanded at a faster rate for the second month in a row, and this February rate was the fastest since March 2012. Plants with fewer than 20 employees contracted for the third straight month, however, although this rate of contraction has been fairly modest.
Custom processors expanded for the fourth month in a row, and this rate of expansion in February was significantly faster than the previous two months. Metalcutting job shops expanded for the fourth time in five months, although this rate of expansion was virtually negligible.
The North Central–East region, which is heavily dominated by the automotive industry, has been booming since October, and its index has been above 56.0 every month since. The North Central–West has expanded for three months in a row, while the Northeast has been contracting since last July.
Future capital spending plans for the next 12 months have taken a huge hit the last four months. In February, they contracted 36.3 percent compared to one year earlier. The annual rate of change contracted for the second straight month.