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46 MoldMaking Technology January 2015 REPORT End Market By Steve Kline Jr. FOR MORE INFORMATION: Steve Kline Jr., Director of Market Intelligence, Gardner Business Media Inc. skline2@gardnerweb.com / gardnerweb.com/economics/blog Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-15 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13 Aerospace and Automotive Aerospace industrial production grew at a decelerating rate throughout 2013 and into the first half of 2014, but that trend reversed in July and production has grown at an accelerating rate since then. Current aerospace production lev- els are virtually at their peaks since late 2007 and early 2008, and the growth rate should continue to accelerate. A significant reason for this growth is that system revenue passenger miles have grown at an accelerating rate since April 2013. Real disposable income also grew at an accelerating rate throughout 2014. Therefore, based on past trends, aerospace industrial production should continue to grow faster throughout 2015. In November, our aerospace business index grew for the third month in a row and for the eighth month out of the first 11 of 2014. New orders were growing at their fastest rate since January 2014, and backlogs increased in three of the previous five months, indicating that capacity utilization within the aerospace manufacturing industry should be rising. Despite the relative strength of the dollar, exports grew each of the previous three months as well. Aerospace Production Poised for Growth in 2015 According to our November business index, the automotive industry grew 15 of the last 18 months, although it has been more up and down since last July. New orders and production grew in the month after contracting in October. Backlogs have been contracting since last April, but they have contracted less since August. Employment decreased in October and November, but exports expand- ed in November for the first time since June. Supplier deliveries lengthened at a fairly constant rate throughout 2014. Material prices increased at their slow- est rate of the year, but, at the same time, prices received by automotive parts makers have been increasing at an accelerating rate since June. Finally, future business expectations are relatively strong. The automotive industry has been a significant driver of the resurgence in the U.S. moldmaking industry the last two years, and it is likely that automo- tive will continue to drive increased mold production for the next several years. There should be an increase in vehicle launches that will require many new molds to be produced. In addition, these new molds are likely to be more complex, as automotive OEMs design distinctive styling into their bumpers, taillights and other molded parts. In fact, the automotive industry and custom processors (roughly 70 percent of custom processors do work for the automotive industry) are expected to greatly increase their spending on new molds, injection molding equipment and machine tools in 2015, according to our research. Automotive Industry Drives Mold Production System Revenue Passenger Miles (12-mo ROC) System Revenue Passenger Miles Leads Aerospace Production Aerospace Production (12-mo ROC) 25 20 15 10 5 0 -5 -10 -15 -20 -25 25 20 15 10 5 0 -5 -10 -15 -20 -25 Automotive Business Index 100 90 80 70 60 50 40 30 20 10 0 100 90 80 70 60 50 40 30 20 10 0 Ma y-12 Jan-13 Sep-13 Ma y-14 Sep-14 Jan-15 Jan-12 Sep-12 Ma y-13 Jan-14 Jan-14