Registered Growth Expected Later in Year 47.5 Total Mold Business Index for July 2008
The total Mold Business Index is a weighted average of the sub-indices for new orders, production, employees, backlog, exports and supplier deliveries.
The bar was set pretty low, but the recent industrial sector data show that the economy is holding up much better than in previous downturns. Manufacturing is not collapsing, and we still expect that conditions will gradually improve as we head into 2009. The Mold Business Index (MBI) for July is 47.5. This is a 4.8-percentage point increase from the June value of 42.7.
Steady readings were reported in all of the sub-indices that measure activity levels except Supplier Delivery Times, which were moderately slower for steel. Continued increases in the cost of steel and resins kept the Materials Prices component near its all-time high. The Materials Prices sub-index is not included in the overall calculation of our MBI, so the sharp increase in the prices of steel and resins in recent months does not push the Index value higher and is not interpreted as positive news. The Future Expectations component pushed up to a solid 73.5.
The data from most segments of the plastics industry have posted declines so far this year, but here too the data remain above the levels hit during the last recession. Our Injection Molding Business Index is down 6 percent for the year-to-date, but the downward momentum has slowed, and the Index is expected to register growth later this year. This means that total demand for most plastics products, as well as new molds and tooling are at or very near their cyclical bottoms and will gradually start to increase by the end of 2008.
The equities markets have declined to a level that is in the official “bear market” range, but corporate profits are still strong. This means that the market may be very near its cyclical bottom, and after a few months of consolidation, the uptrend will resume later this year. One factor that would definitely spur growth in both the equities markets and the overall economy is a downtrend in crude oil and natural gas prices. High gasoline prices and declining home equity values have pushed consumer confidence levels down to rock-bottom. But gasoline demand is declining, and the prices finally appear to have entered a downtrend.
The Mold Prices sub-index for the latest month was 38.2. This means that the prices received for new molds continued downward. At the same time, the prices paid for materials increased sharply as the latest sub-index for Materials Prices was 88.2. Supplier Delivery Times were somewhat slower, as this sub-index posted a value of 38.2.
Finding, Training & Retaining Employees, Part 13
How older technology will impede your business in a competitive global market and how to invest properly in moldmaking equipment.
A look at some of the factors influencing the success of your machining center investment.