Moldmaking Starts off 2021 With Expanding Orders and Production
The Moldmaking Index reports expanding conditions in six of the last seven months, aided by improving domestic new orders activity.
The Moldmaking Index has reported expanding conditions in six of the last seven months, aided by improving domestic new orders activity.
The Moldmaking Index started off 2021 on a positive note thanks to a January reading of 53.1. Moreover, in six of the last seven months the Index’s readings have registered above 50, which indicate growth or expansion within the moldmaking and molding segment of the economy as compared with the prior month. January’s results saw expanding activity in production, new orders and employment. An increase in the order-to-delivery time of upstream goods to survey respondents lengthened, which sent the supplier delivery reading to its highest level since Q3 2018. Lastly, survey results indicate contraction of both backlog and export orders activities.
The highly correlated historical relationship between supplier deliveries activity (measured by order-to-fulfillment duration) and material prices help us understand why COVID-19’s impact is resulting in rising prices.
The passing of the holiday season did not in itself result in an improvement in supply chain delivery performance as was hoped. January’s supplier delivery reading underscores that available shipping capacity is only one of many challenges facing supply chains. In addition to the molding community dealing with low inventory or out-of-stock situations, the inventory which is available is commanding a price premium. The latest material prices data indicates that an overwhelming proportion of survey respondents in January reported rising input costs while a relatively smaller proportion reported passing price increases through to their own customers.