Moldmaking Reports Broad-Based Activity Expansion

The September Gardner Business Index (GBI): Moldmaking closed out the final month of the third quarter at a 59.7 reading. The near two-point gain was the result of expanding activity in backlog, production, employment and export orders activity. The overall reading, however, was inflated by a 10-point increase in the supplier delivery reading, taking it to a new all-time high. (Recall that higher supplier delivery readings correspond with worsening supply chain performance.) An accelerating expansion in export orders helped to soften the month’s slowing expansion in total new orders activity.

The third quarter brought the problem of a diminished labor force into sharp focus for the industry as a scarcity of new hires resulted in sequential months of slowing growth in payrolls. These latest labor challenges, coupled with the industry’s ongoing supply chain problems, weighed heavily on production activity which reported lackluster readings as the quarter progressed.  This shortage of both materials and labor resulted in a “production deficit,” measured as the vertical gap between total new orders and production readings. However, it is the persistence of this gap at five months and counting which is having the greatest impact on the industry.