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Moldmaking Business Index Industry Outlook 14 MoldMaking Technology —— JANUARY 2018 By Michael Guckes 2018: Long-Term Opportunities Abound M anufacturing everywhere is undergoing considerable change. This change can represent a threat to what has worked in the past, or it can represent an oppor- tunity to grow in new markets and for companies to try differ- ent things. Gardner Intelligence recognizes the challenges that industry, regulatory and technological change can bring to any shop. The purpose of this 2018 outlook is not only to share the trends that Gardner Intelligence's data reveals, but to build awareness of these trends as well, so mold builders can better prepare for future opportunities and grow their businesses. Moldmaking Growth Trends The GBI: Moldmaking Index results between January and October of 2017 broke records with an average index reading of 55.8. By comparison, the last time the index experienced a comparable period of prolonged expansion was in 2014, when the average index reading from January to October was a respectable 53.8. When interpreting Gardner Intelligence data, a reading of 50.0 means that no change in the industry has occurred. All index readings above 50 represent growth. The greater the number is above 50, the faster the speed at which the indus- try is expanding. Readings below 50 work in a similar manner but represent industry contraction. The index is calculated by six underlying business conditions: backlog, employment, exports, new orders, production and supplier deliveries. The total index is the average of the movement of these six driv- ers. During a typical month, all six drivers may be expanding, but those expanding below the average of the six are consid- ered to "pull the index down." The two most significant drivers of the Moldmaking Index in 2017 have been the production and new orders compo- nents, both of which had multi-year high growth values in 2017 that easily surpassed high records from the past. The readings for new orders in 2017 have been especially strong, which likely explains the growth in backlog and exports figures in 2017. At the end of October, backlog readings reached their 10th consecu- tive month of expansion. This far surpasses the most recent record for consecutive months of backlog growth, which lasted for three months. Growth in new orders, which Gardner Intelligence uses as a proxy for demand, has greatly improved in 2017. Data on prices in 2017 indicates that this increased demand for molds is resulting in improved pricing for mold builders. Readings of prices received began improving (or having Positive data helps mold builders prepare for upcoming industry changes and growth opportunities. Data from the Moldmaking Index indicates that the industry has grown at a faster rate during the first 10 months of 2017 than during any other consecutive 10-month period in at least the last five years. The primary drivers behind this growth are increases in new orders and production. 7/13 1/14 7/14 1/15 7/15 1/16 7/16 1/17 7/17 40 45 50 55 60 52.8 Moldmaking Index