No Change in Activity Levels

Activity levels for North American moldmakers didn’t change much during the latest reporting period. So after losing altitude for most of 2006, moldmakers seem to be in an uneasy holding pattern as the year closes. Based on the latest survey for our Mold Business Index (MBI), the MBI value for October was exactly 50.0. This is a 6.1 percentage point increase from the September value of 43.9. All of the components that comprise the MBI were mostly steady in October when compared with the previous month. Materials Prices increased again, but the upward momentum is abating. Future Expectations elevated to 58.3 in October after a neutral reading of 50.0 in September.

Problems associated with the Big 3 automakers, a sharp decline in residential construction activity and ongoing concerns about the war in Iraq continued to weigh on the U.S. manufacturing sector in recent weeks. These issues notwithstanding, the worst appears to be over. The U.S. economy continues to expand, overall employment levels are strong and energy prices are declining. The economy will regain its upward momentum in 2007 and our forecast calls for a gradual improvement in moldmaking activity shortly thereafter. Global demand for molded products is expanding and the capacity utilization rates for most sectors of the North American injection molding industry are also on the rise. These factors will spur increased capital investment for new injection molding machines and tooling next year.

In the latest month, the sub-index for New Orders of molds was 50.0, which means that the amount of new business was unchanged when compared with the previous month. Future gains in the total MBI depend on steady increases in new orders of molds. Production levels were also unchanged, as the latest Production sub-index was 50.0. The Employment component was 55.6, which indicates that overall payrolls were up a bit in recent weeks. The industry’s overall backlog was mostly steady, as the Backlog sub-index registered 47.2 in October.

The Mold Prices sub-index for October was 50.0. This means that the prices received for new molds were also unchanged in the latest month. The prices paid for materials increased again, as the latest sub-index for Materials Prices was 61.1. Supplier Delivery Times were little changed on average, as this sub-index posted a value of 47.2 in October. There was no change in the number of offshore orders for new molds, as the Export Orders sub-index was 50.0.

The Future Expectations sub-index for October was 58.3. This is up nicely from the 50.0 that was posted in the previous month. There was no change in the reported capital investment plans.