The Beginning of a Gradual Uptrend
Mold Business Index for June 2007
The headline number for our Mold Business Index (MBI) in June indicates that business conditions for North American mold builders were unchanged when compared to the previous month, but a closer analysis of the data reveals that there was more good news than bad in recent weeks. The latest value for the MBI is 50.0. This is a one-percentage point decrease from the May value of 51.0. A solid rise in the crucial New Orders component was offset by a drop in overall Employment levels. The Future Expectations component remained optimistic at 62.5.
Most of the other major economic and end-market indicators released recently show that U.S. manufacturers continue to pare their inventories while at the same time gradually increasing their levels of production. These trends are expected to persist through the second half of 2007. Overall demand for plastics products continues to rise, and capacity utilization rates for injection molders will start to trend upward in the coming months. And though we are now past its cyclical low-point, the residential construction sector will be a drag on overall economic growth until at least the spring of 2008. High energy prices continue to be the wild card in the forecast.
Featured Content
The sub-index for New Orders of molds was a heartening 57.1 in June, which means that the number of new projects increased significantly when compared with the previous month. Future gains in the total MBI depend on increases in new orders of molds. And even more good news stems from the fact that the Backlog component posted a rare increase to 51.8 in June. Production levels were moderately higher, as the latest Production sub-index was also 51.8. The Employment component was 44.6, which means that overall payrolls decreased in recent weeks.
The Mold Prices sub-index for the latest month was 42.9. This means that the prices received for new molds continue to fall, though at a decelerating rate. The prices paid for materials increased again (also at a decelerating rate), as the latest sub-index for Materials Prices was 57.1. Supplier Delivery Times were slower for a few respondents, as this sub-index posted a value of 48.2 in June. There was a small decline in the number of offshore orders for new molds, as the Export Orders sub-index was 46.4.
New orders for molds posted a monthly increase for the first time since last November. This could mark the beginning of a gradual uptrend that is expected to last through 2008.
June 2007 | |||||
% Positive |
% |
% Negative |
Net % Difference | Sub- Index |
|
New Orders |
39 | 36 | 25 | 14 | 57.1 |
Production |
29 | 46 | 25 | 4 | 51.8 |
Employment |
7 | 75 | 18 | -11 | 44.6 |
Backlog |
36 | 32 | 32 | 4 | 51.8 |
Export Orders |
0 | 93 | 7 | -7 | 46.4 |
Supplier Deliveries |
4 | 89 | 7 | -3 | 48.2 |
Materials Prices |
18 | 78 | 4 | 14 | 57.1 |
Mold Prices |
11 | 64 | 25 | -14 | 42.9 |
Future Expectations | 36 | 53 | 11 | 25 | 62.5 |
Total Mold Business Index for June 2007: 50.0. The total Mold Business Index is a weighted average of the sub-indices for new orders, production, employees, backlog, exports and supplier deliveries. |
RELATED CONTENT
-
The Realities of Aluminum Tooling
Using aluminum tooling instead of traditional tools steels reduces cycle time and costs, but requires up-front, open communications between moldmaker, molder, material supplier and hot runner manifold supplier.
-
The Meaning of the Five "M's"
Man, material, machines, methods and metrics. What does this refer to? A suite of technologies, hardware, software and services focused on returning leaked profit to a company's bottom line.
-
How to Optically Polish Aluminum
There are two methods for optically polishing aluminum - knowing the right one for your project will save you time and money.