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MoldMaking Business Index Total MBI for October 2013: 50.6 2.3 Increasing Production 54.1 52.0 2.1 Increasing Backlog 45.9 40.0 5.9 Contracting Employment 50.7 50.0 0.7 Increasing Exports 47.1 45.3 1.8 Decreasing Supplier Deliveries 54.8 53.6 1.2 Longer Material Prices 62.3 61.8 0.5 Rising Prices Received 49.0 48.8 0.2 Declining Future Expectations 69.2 69.0 0.2 Improving MoldMaking Business Index 50.6 48.2 2.4 Increasing Our latest survey of the North American moldmaking industry indicates that overall activity levels improved in October when compared with the previous month. This halted a three-month trend downward. The MoldMaking Business Index (MBI) for October 2013 is 50.6. The latest index value is a 2.3-point increase from the September value of 48.2 and a 0.2-point increase from the 50.4 value posted in October 2012. With the October rise back to just above the 50 line, our index has fully recovered from a couple of weaker months in late summer and has moved back to the range where it has been for most of this year. The overall trend throughout 2013 for the MBI has been flat-to-down, and the October reading certainly continued this trend. While the North American mold industry is holding its own, other segments of the industrial sector are performing quite well. The ISM Manufacturing Index followed up the strong showing in September with another small gain in October to a solid 56.4. Demand for autos has moderated in recent weeks, but the long-term trend upward remains intact. Just as it has been for the past several months, the primary reason for the sluggish pace of growth in the economy is the uncertainty stemming from problems in Washington. The economic fundamentals at the present time are actually quite encouraging. The Federal Government is no longer shut down, but rather than actually solve the problem, Congress just pushed it down the road another three months. As I have said before, if our nation's fiscal issues are not resolved in an expeditious and somewhat graceful manner, the effects on the U.S. economy will be negative. The problems with Obamacare are also generating a lot of uncertainty in the private sector. I still 12 MoldMaking Technology December 2013 MoldMaking Business Index 60 55 50 45 40 13 48.4 0/ 50.7 Trend 3 New Orders believe that once we get past these debacles, the pace of economic expansion will From Decrease 1 accelerate. However, it is far from clear Faster 2 when, or even if, that will occur. Taking a closer look at the categories, Slower 18 New Orders was 50.7. This is just barely Faster 10 into positive territory, but it stopped a two-month run of declining orders. Slower 16 Production came in at 54.1, which indiFaster 2 cates that work levels increased at a strong rate. With new orders higher, we Faster 22 should expect improvement in backlogs. Slower 3 Coming in at 45.9, Backlog is near its peak. Employment is 50.7, which means Faster 22 that there was a small rise in moldmakers' payrolls. Prices received were modFrom Decrease 1 estly lower again at 49.0. The upward momentum in materials prices accelerated again as Material Prices registered 62.3. Supplier delivery times continued their recent trend of gradual expansion with a 54.8. The pace of decline in offshore orders moderated a bit as the Exports escalated to 47.1. Rate 8/ Direction 1 9/ 3 13 1 Change 7/ 1 Sept /1 1/ 1 12 2/ 12 3/ 12 4/ 1 5/ 2 12 6/ 1 7/ 2 12 8/ 1 9/ 2 12 10 / 11 12 /1 12 2 /1 1/ 2 13 2/ 13 3/ 13 4/ 1 5/ 3 13 6/ 13 Oct 12 Sub-Indices While the recent government shutdown and ongoing political wrangling about the federal budget and Obamacare have done little to bolster Americans' confdence, the impact on the manufacturing sector has been minimal so far. Recent indicators suggest that the overall manufacturing sector is still expanding, and the plastics industry is one of the real bright spots. Total U.S. output of plastics products escalated by 6 percent in the third quarter when compared with the same quarter last year. The good news for suppliers to the plastics industry is that production of plastics parts has been growing by at least 6 percent for well over a year and a half. Yet despite this extended period of robust growth, the capacity utilization rate for the industry remains stuck at just below 75 percent. If output continues to expand, then very soon the utilization rate will have to rise, as will demand for new molds, tooling and equipment.