Accelerating Production Activity Helps Quell Backlog Expansion

The Gardner Business Index (GBI): Moldmaking closed November at 59.1, falling over two points from the prior month. All six components which constitute the Moldmaking Index remained above 50 — and thus in expansionary territory— for a seventh consecutive month. November was driven by a nearly 12-point decline in backlog activity coupled with much smaller declines in supplier deliveries, new orders and employment. It should be noted that declining component readings which remain above 50 signal only slowing expansion and not an actual contraction in activity. November marked the first time since April that the reading for production exceeded that of new orders, indicating that a greater proportion of moldmakers reported expanding production activity relative to new orders. This may help explain some portion of the decline in backlog activity despite ongoing supply chain problems.

In recent months, as many as 70% of moldmakers have reported that they are passing along higher prices to their customers, representing an increase of roughly 10% since the second quarter. This change, however, pales in comparison to the fact that nearly all moldmakers have experienced rising costs throughout most of 2021. This imbalance suggests that mold builders are likely to experience further price increases in 2022.