Moldmaking Index Reports Slowing Expansion for Second Sequential Month

The Moldmaking Index fell nearly three points in August to close at 57.8. The decline was caused in part by a nine-point and two-point decline in production and employment activity respectively. The reading for supplier deliveries—which monitors order-to-fulfillment timeliness— declined by nine points, signaling that a growing minority of surveyed participants experienced same or shorter order-to-fulfillment times in August. Overall, this latest reading was still well above historic norms. 

Total new order and export order readings were only slightly lower relative to their July readings and continued to signal strong demand. August’s nine-point spread between new orders and production readings represents one of the largest production “deficits” in the history of the Index going back to 2011. In the past, these measures maintained a close relationship, with only a minimal spread between their monthly readings, and even less so any sizable production deficit. Should the inversion of their long-held relationship persist, moldmakers and molders could experience both elevated backlog activity and further heightened pricing power. Increased pricing power would both mitigate rising production costs and protect operating margins.