With a reading of 55.3, Gardner’s MBI showed that the moldmaking industry expanded in March for the third consecutive month and the fifth time in the previous six months. The industry has been generally improving since August, reaching its fastest rate of growth since June 2012. After contracting in February, the index was 8 percent higher than it was in March 2013. The annual rate of change, which had contracted at a slower rate in previous months, is now growing.
New orders and production both grew for the third month in a row. New orders increased substantially to a rate that was last seen in the first half of 2012. Production also expanded at a significant rate, but similar to that of the previous four months Backlogs increased for the second time since April 2012. They have generally increased since September, but have most noticeably improved since December. The trend indicates that capacity utilization and capital spending should increase in 2014. Employment also increased at a significant rate for the third consecutive month, while exports did not contract for the first time since June 2012. Supplier deliveries have been increasing at a generally more rapid rate since last July.
Material prices continued to increase in March, but they did so at the slowest rate since November. Prices received increased for the third time in four months. Future business expectations are still quite high, but they are at their lowest level of the year.
Growth at facilities with more than 20 employees was quite strong in the month with an index close to 60.0. However, facilities with 19 employees or fewer contracted for the second consecutive month with an index of 44.8.
Custom processors (molders) expanded again in March as they have in all but three months since the index began, and metalcutting job shops (moldmakers) grew for the third time in five months. However, the overall index is higher than the index for either of these groups, indicating that industry growth is being driven more by OEMs than by contract facilities.
Future capital spending plans were at their second highest level since the index began in December 2011. The month-over-month rate of change was 8.3 percent in March, the third consecutive month of growth. The annual rate of change has grown at a slower rate in the previous four months, however.
To see the historical breakdown of our business index and each of its subindices, visit gardnerweb.com/forecast/moldmaking.htm.