Moldmaking Index Issues Expansionary February Reading
February marks the highest reading since mid-2018 at 57.2, presenting an aggressive upward trend caused by elevated readings for every index component.
The Moldmaking Index has registered expanding activity over the last two quarters which has come from surging supplier delivery readings; however, more recent data points to a broad-based improvement in all activity readings.
The Moldmaking Index closed February up 4.1 points higher from the prior month to register at 57.2, marking its highest reading since mid-2018. The latest reading extends the volatile yet expansionary trend in overall business activity initiated eight months ago in August. February’s strong performance was the result of elevated readings for every index component including 18-month high readings for employment and export orders.
Total new orders activity has registered quickening expansion in the eight months through February. This may partially explain the recent surge in 2021 employment activity.
The reading for supplier deliveries also moved 6 points higher in February, exceeding a reading of 70 for the first time, and consequentially setting a new all-time high. A reading of this magnitude suggests that an overwhelming majority of moldmakers and molders are experiencing slowing order-to-fulfillment times for upstream goods which may restrict desired production levels. Furthermore, when supply chains are sluggish, material costs also tend to rise. The history of the Gardner Business Index (GBI) bears out this critical insight as manifested by the highly correlated movement of supplier deliveries activity with material prices readings. This relationship suggests that even limited disruptions to supply chains can result in significant price changes for upstream goods.