Gardner Business Index: Moldmaking Starts 2018 Breaking Records
New orders and production lift Gardner Business Index: Moldmaking, at 60.2 for January.
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January’s reading of the Moldmaking Index at 60.2 set a new record-high and was well above the prior month’s and the average 2017 calendar year readings of 55.4 and 55.5, respectively. For a
second consecutive month, no components of the Moldmaking Index contracted.
The strongest drivers of the Moldmaking Index in 2017 and in the first month of 2018 have been new orders and production. The outpacing of growth in new orders to growth in production has resulted in a sharp increase in backlogs.
Registering 60.2 for January, the Gardner Business Index (GBI): Moldmaking expanded at its fastest pace in recorded history. Compared to the same month one year ago and to the average reading for 2017, the Moldmaking Index increased by 9.0 percent and 7.6 percent, respectively. Gardner Intelligence’s review of the underlying data for the month revealed that new orders jumped drastically in January with the new orders reading increasing approximately 12 points since December. The reading for production also showed significant expansion. New orders and production lifted the Moldmaking Index higher while backlog, supplier deliveries and employment minimally impacted the Moldmaking Index. Exports was the only component that significantly lowered the Moldmaking Index during the month. However, no components contracted.
For a second month in a row, new orders expanded faster than production, and it did so by a considerable margin. Reviewing past trends from the Gardner Business Indexes reveals that when growth in new orders exceeds growth in production, it is typical for manufacturers to experience additional growth in future months because manufacturers are adjusting to increased demand.
About the Author
Michael Guckes
Michael Guckes is the chief economist for Gardner Intelligence, a division of Gardner Business Media (Cincinnati, Ohio, United States). He has performed economic analysis, modeling and forecasting work for nearly 20 years among a range of industries. He is available at mguckes@gardnerweb.com.
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