Contraction is the Consistent Trend for Moldmaking
The August Gardner Business Index (GBI): Moldmaking saw more of the same contraction activity that has been reported the last four months.
GBI: Moldmaking activity dropped two points in August. Photo Credit, all images: Gardner Intelligence
Moldmaking activity has contracted for the fifth month straight, ending August at 43.7, down two points from July.
All Gardner Business Index (GBI): Moldmaking components contributed to this overall contraction. Most significant in August was the contraction of employment, dropping a full three points from July when it was just hovering above flat. While noteworthy, contraction in employment is not surprising given that it was accompanied by another month of contraction for new orders, production and backlog, each of which is related to employment. When new orders contract, production catches up to backlog and then contracts. Add the employment surge thanks to the pandemic, and it is due to contract in line with these other components.
Backlog and new orders components are related to the contraction in employment. (This graph is moving on a three-month moving average.)
Supplier deliveries inched about as close as possible to flat without landing at 50, the line between contraction and expansion. Supply chain disruption in the rearview mirror is a good thing. At the same time, demand levels that are easily and quickly met are associated with concerns about volume robustness.
Exports steadily contracted again as well. Sentiment regarding future business expanded a bit faster in August, suggesting that despite current trends, there is still optimism that things will improve in manufacturing.
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