Moldmaking Index Falls on Export and Backlog Contraction
Volatile shifts in the Moldmaking Index components may be a sign of more to come.
Registering 48.3 in February, the GBI: Moldmaking Index contracted at an accelerating rate. Gardner Intelligence’s review of the underlying index components observed that the Index -calculated as an average of its components- was supported by jump in supplier deliveries, followed by modestly expanding activity for new orders and production activity. The Index was pulled lower by a very sharp contraction in backlog and export activity.
February’s strong expansion in supplier delivery activity was more than offset by a severe contraction in backlog and export activity. The overall result was a quickening contraction in overall business activity. Gardner Intelligence expects that most — if not all — of its indicators will be subjected to shocks from COVID-19. That the virus originated in Asia suggests that American manufacturers in the immediate future should pay particular attention to their supply chains and expect increased volatility in export orders and material prices.
Manufacturing Outlook as a Result of COVID-19
The impact of COVID-19, widely known as the “coronavirus”, is expected to have an adverse effect on the Moldmaking Index in the coming months. The efforts of Asian governments in January and February -and by a widening collection of nations in February and March- to combat the spread of COVID-19 while necessary, is also having a detrimental impact on the world’s supply chain, as workers, companies and cities are affected by quarantine measures. This will most immediately restrict the normal flow of upstream and sub-component goods which are necessary for the proper functioning of the manufacturing sector.
The Moldmaking Index is unique in its ability to measure business conditions specific to the molding industry on a monthly basis. This means that moving forward the Index will be able to quantify both the negative impact from the virus at present along with the timing and strength of molding’s eventual recovery from this virus. At this time, it is particularly important for our readers to complete the GBI survey sent to them each month. Your participation will enable the best and most accurate reporting of the true magnitude and duration of COVID-19. It will allow you and your peers to make data-driven decisions at a time when there may be a strong temptation to make impulsive gut-decisions that could make a difficult situation worse.