Moldmaking Index Marks Sharp Deceleration
The latest survey data suggests that the current market expansion may be nearing maturity as slowing growth in new orders and production is eclipsed by increasing growth in production throughput, factors that affect the Moldmaking Index, at 53.0 for June 2018.
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Supplier deliveries and employment were the primary supporters of June’s Moldmaking Index. All other components registered lower readings in comparison to readings from the prior month.
Readings for new orders, production and backlog have slowed sharply since the beginning of the year. All three metrics registered only slightly above 50 in June, indicating only very slight expansion from the prior month.
Registering 53.0 for June, the Gardner Business Index (GBI): Moldmaking experienced a sharp drop after posting its fourth highest reading during the prior month. During the first half of 2018, the Moldmaking Index averaged 57.9, better than the average 55.5 during the 2017 calendar year. The Moldmaking Index fell by 6.9 percent from the same month one year ago. Gardner Intelligence’s review of the underlying data for the month reveals that growth in supplier deliveries and employment drove the Moldmaking Index’s average-based calculation higher while production, new orders, backlog and exports reduced the Moldmaking Index’s average-based calculation. Only exports reported contraction in June, while production and backlog registered only slightly above 50, a value that indicates “no change.”
The latest survey data suggests that the current market expansion may be nearing maturity as slowing growth in new orders and production is eclipsed by increasing growth in production throughput, which is indirectly measured by supplier deliveries and employment. Backlog data often represents a useful short-term gauge of the manufacturing environment. While backlog growth has slowed since reaching an all-time peak during the first quarter, the reported increase in backlogs in prior months may provide some cushioning to overcome any near-term softness in economic conditions.
The Moldmaking Index reading from June solely among custom processors moved higher for a second month. Custom processors generally indicated better economic conditions, including increased new orders and backlog. However, these figures were calculated from a limited number of survey respondents.
About the Author
Michael Guckes
Michael Guckes is the chief economist for Gardner Intelligence, a division of Gardner Business Media (Cincinnati, Ohio, United States). He has performed economic analysis, modeling and forecasting work for nearly 20 years among a range of industries. He is available at mguckes@gardnerweb.com.
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