GBI: Moldmaking for May 2016 - 48.1

With a reading of 48.1, the Gardner Business Index showed that the moldmaking industry contracted in May for the second month in a row, although the rate of contraction decelerated and the general trend of the index has been positive since October.

New orders contracted for the second month in a row, but, like the overall index, the trend in new orders has been positive since October. Production expanded for the second time in three months. It was flat the other month. The backlog index contracted at an accelerating rate for the third month in a row. Overall, backlogs have contracted since November 2014. Employment increased for the third month in a row, and in these three months, the rate of increase was virtually the fastest since June 2014. Exports contracted at a significantly slower rate than in April, and supplier deliveries shortened at a minimal rate for the third month in a row.

The material prices index increased for the fourth month in a row. The current rate of increase was similar to the second quarter of 2015. Prices received decreased for the eighth month in a row, but future business expectations improved in May, reaching their highest level since December. 

Companies with more than 250 employees expanded at a very strong rate for the fourth month in a row, with an index above 60 in two of those four months, while plants with 100-249 employees contracted for the fourth time in five months. Facilities with 50-99 employees grew at a very strong rate for the sixth month in a row. Their May index of 60 was the highest since December 2011. Companies with 20-49 contracted at an accelerating rate for the second month in a row, and companies with fewer than 20 employees continued to contract.

Custom processors expanded at an accelerating rate for the third month in a row, while metalcutting job shops contracted for the 12th time 13 months. 

The Southeast was easily the fastest growing region in May, growing at its fastest rate since May 2015. The only other region to grow was the Northeast, which expanded for the second month in a row. Both the West and South Central were flat, and the North Central-East contracted for the third month in a row. The North Central-West also contracted after being the fastest growing region the previous two months.

In May, future capital spending plans were above average for the third time in five months, reaching their highest level since January and second-highest level since November 2014. In both April and May, spending plans have increased more than 120 percent compared with one year earlier. This month was the fifth time in six months that future capital spending plans increased compared with one year earlier.