Strong Three-Month Performance

High energy and materials prices notwithstanding, the Mold Business Index (MBI) registered its strongest three-month performance in several years during the third quarter of 2005. According to the latest survey, the MBI value for September was 57.3. This was a 3.0 percentage point increase from the August value of 54.3. Once again, the New Orders, Production, Employment and Backlog sub-indices all advanced during the latest month. And once again, the negative factors were another reported rise in Materials Prices and longer Supplier Delivery Times. The Future Expectations sub-index stayed at a high level, and was little changed from the previous month’s reading. It was an optimistic 74.2 in September.

The September sub-index value for New Orders of molds was 67.7, which means that the number of new orders for molds was significantly higher when compared with the previous month.

The trend in the new orders data during most of the past 18 months has been a steady rise, and improvement in this component has been accelerating since last spring.

Production activity in September also increased, as the latest Production sub-index was a strong 66.1. The Employment component for September was 59.7, which indicates that the total number of workers in the industry increased again. The industry’s total backlog also was a bit longer, as the September Backlog sub-index was 53.2.

The Mold Prices sub-index for September was exactly 50.0. This means that prices for new molds held steady when compared with the previous month.

The prices paid for materials such as steel, mold bases, and resins continued to rise, as the sub-index for Materials Prices was 71.0. Supplier Delivery Times were once again a bit slower overall, as this sub-index posted a value of 45.2 in September. Yet despite the persistent price pressures, moldmakers believe that business conditions will improve in the coming year.

According to the survey, the most-cited problem confronting North American moldmakers at the present time is short leadtimes.

Other problems receiving multiple mentions include a shortage of skilled labor, offshore competition, the high costs of materials, less favorable payment terms, longer delivery times for materials, and ill-conceived U.S. trade policies.

Our forecast calls for gradually rising activity in the plastics manufacturing and tooling industries throughout the remainder of 2005 and into 2006. This will result in a gradual, but steady gain in the MBI data.

September 2005
	% Positive	% Equal	% Negative	Net % Difference	Sub-Index
New Orders Production Employment Backlog Export Orders Supplier Deliveries Materials Prices Mold Prices Future Expectations	58 52 36 32 3 7 42 13 58	19 29 48 42 97 77 58 74 32	23 19 16 26 0 16 0 13 10	35 33 20 6 3 -9 42 0 48	67.7 66.1 59.7 53.2 51.6 45.2 71.0 50.0 74.2
Total Mold Business Index for September 2005: 57.3. The total Mold business Index is a weighted average of the sub-indices for new orders, production, employees, backlog, exports and supplier deliveries. The MBI is based on a monthly survey from which a diffusion index is calculated based on 50.0. A value above 50.0 indicates that business activity expanded, while a value below 50.0 means that business levels declined.