Total MBI for September 2014

With a reading of 45.7, the MoldMaking Business Index showed that the industry contracted in September for the first time this year. The index has steadily fallen since its peak in May, and this was its lowest level since December 2012. Compared to one year earlier, the index contracted for the first time since February and just the second time since September 2013. The annual rate of change was still growing, but that rate of growth decelerated for the first time.

Both new orders and production contracted for the first time since last year, and backlogs have contracted for four straight months. In fact, September showed the fastest contraction in backlogs since December 2012, and it was the first time since February that backlogs contracted compared to one year earlier. Based on the trends in backlogs, capacity utilization should continue to increase through at least the first quarter of 2015, however. This would indicate increased capital spending by the moldmaking industry next year. Employment contracted for the third month in a row, and exports contracted for the third time in four months, as the dollar has strengthened in recent months. Supplier deliveries lengthened at their slowest rate since January.

Material prices have continued to increase at a relatively elevated and constant rate since December 2013. Prices received have grown in three of the last four months, but the rate of increase has been relatively modest. After taking a significant dive the previous three months, future business expectations bounced back noticeably in September.

Plants with more than 100 employees expanded at a modest rate in the month, but all other plant sizes contracted. Facilities with 50-99 employees have contracted three of the last five months, plants with 20-49 employees have contracted in two of the last three months, and those with 1-19 employees have contracted at a significant rate for four consecutive months.

Custom processors contracted for the first time since February, with their index falling to 40.5 from 51.5. This was the fastest rate of contraction since the index began in December 2011. Metalcutting job shops contracted for the second month in a row, although the rate of contraction decelerated compared to August.

Every region contracted in September: The West and North Central–East had relatively modest rates of contraction, while the Northeast and North Central–West contracted at more significant rates.

Future capital spending plans for the next 12 months im-proved slightly from August and remained above the survey’s historical average. The month-over-month rate of change grew at a rate of 17.7 percent. The annual rate of growth remains strong and has been fairly constant in 2014.