With a reading of 50.6, the MoldMaking Business Index showed that the moldmaking industry expanded in August for the eighth straight month and the ninth time in 10 months, however, the rate of growth was the industry’s slowest in 2014. The growth rate has fallen steadily since it peaked in May, although, for six consecutive months, the index has grown compared to one year earlier. And the annual rate of change has grown faster and faster each month since February.
Both new orders and production grew for the ninth month in a row, although new orders grew at their slowest rate of the year while production expanded at a slightly faster rate compared to July. Backlogs have contracted for three straight months, but at a slower rate the last two. Annually, backlogs have grown faster and faster for six straight months, indicating that capacity utilization and capital equipment investment should increase sharply as we move into 2015. Employment contracted for the second month in a row, and exports contracted for the second time in three months as the dollar has strengthened in recent months. Supplier deliveries have lengthened at a consistent rate since April.
Material prices increased at a slower rate than in July. Since February, the rate of increase has slowed, however it is still higher than it was for most of 2013. Prices received have bounced back and forth between increasing and decreasing in 2014, and they increased minimally in August. Future business expectations have plunged the last two months to their lowest level since November 2012.
After contracting in July, plants with 20-49 employees expanded at a very fast rate in August, and facilities with 100-249 employees continued to grow at a significant clip as well. Plants with more than 250 employees contracted for the first time in 2014, however, and plants with 50-99 employees contracted for the second time in four months. Plants with fewer than 20 employees contracted at their fastest rate since January 2013.
After growing for five straight months, metalcutting job shops contracted at their fastest rate since October 2013. Custom processors have grown five of the last six months.
Future capital spending plans for the next 12 months were less than $1 million for the first time since February, and the month-over-month rate of change contracted for the first time since December 2013. The annual rate of change continued to grow at a strong rate and has been relatively stable in 2014.
To see the historical breakdown of our business index and each of its subindices, visit gardnerweb.com/forecast/moldmaking.htm.