Biggest Year-Over-Year Jump in Survey History
Total Mold Business Index for January 2011: 57.5.
% % % Net % Sub-
Positive Equal Negative Difference Index
New Orders 55 20 25 30 65.0
Production 40 35 25 15 57.5
Employment 40 50 10 30 65.0
Backlog 45 35 20 25 62.5
Export Orders 10 85 5 5 52.5
Supplier Deliveries 10 65 25 -15 42.5
Materials Prices 30 70 0 30 65.0
Mold Prices 10 70 20 -10 45.0
Future Expectations 55 35 10 45 72.5
The total Mold Business Index is a weighted average of the sub iIndices for new orders, production, employees, backlog, exports and supplier deliveries.
The Mold Business Index (MBI) for January 2011 is 57.5. This is an 8.6-point increase from the December value of 48.9, and it is a huge 17.3-point increase from the MBI value of 40.2 posted in January of last year. This is the biggest year-over-year jump in the history of our survey. Except for longer Supplier Delivery Times and higher Materials Prices, all of the activity indicators in this month’s MBI are much improved when compared with the previous month. There was another strong gain in the Employment component, and the jump in the Future Expectations sub-index indicates that moldmakers are increasingly optimistic about business levels in the coming months.
Growth in vehicle sales was impeded by the bad weather in recent weeks, as was the gain in overall employment. The trends in both of these indicators remained positive, but the momentum was not nearly as strong as we would have seen without all of the snow and ice that fell on much of the country.
And the disappointing labor market totals from January contrast with the gratifyingly upbeat reports from some of the other key industrial indicators from early in the first quarter. The ISM surveys, which are less vulnerable to weather effects, indicate that there was a solid acceleration in manufacturing growth last month. Factors supporting stronger growth include improving consumer and business confidence, lower taxes and increased bank lending.
The overall gain in real GDP was a middling 3.2% in the fourth quarter of 2010. The surprising news was final sales of domestic product, which measures current demand for U.S.-produced goods and services. The 7.1% gain was the biggest jump in more than 25 years, and it is evidence that consumers and businesses are spending more aggressively. Business investment was the driving force for most of last year, but as consumers start to spend, growth will accelerate. Net exports have also been a strong contributor to our overall economic growth in recent months.
The New Orders component for our MBI shows that the number of new projects jumped in recent weeks, as this sub-index for January is 65.0. Production levels escalated as well, and the latest Production sub-index is 57.5. The Employment component is a robust 65.0, which means that hiring activity continues to expand. The Backlog component is an unusually-high 62.5.
The Mold Prices sub-index for January is 45.0. The recent trend in this component indicates that mold prices are still declining, but prices should soon start to firm up. The prices paid for most types of materials and components continue to escalate. The sub-index for Materials Prices is 65.0. Supplier Delivery Times are again slower, as this sub-index is 42.5. There was no
significant change in offshore orders for new molds, as the Export Orders sub-index is 52.5.
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