With a reading of 55 in February, the Gardner Plastics Business Index grew for the second month in a row and at its fastest rate since January 2015. In general, the industry has trended up since July 2016.
New orders and production both grew at a very strong rate. The rate of growth in new orders was the fastest since March 2016. And the rate of growth in production was slightly slower than last month, but still very strong. The backlog index dipped back into contraction after expanding for just one month. However, the trend indicated that capacity utilization should increase in 2017. Employment increased for the second straight month and at the fastest rate since January 2015. Exports continued to contract but at a slightly accelerating rate since October 2016. Supplier deliveries continued to lengthen.
Material prices increased at a significantly accelerating rate in each of the last three months. The index was at its third-highest level ever, behind only January and February 2013. Prices received increased for the fifth time in six months. The rate of increase has rapidly accelerated. Also, that index reached its highest level since the survey began in December 2011. Future business expectations remained strong as the index was above 80 for the second month in a row.
Custom processors grew for the second month in a row and at their fastest rate since January 2015. Plastics/rubber products have had strong growth in six of the last seven months. The automotive industry continued its strong growth for the fourth month in a row. Electronics expanded at a strong rate for the fifth time in six months. And the medical index grew moderately for the second month in a row.
The South Central was the fastest-growing region in February. It grew for the first time since May 2016. It was closely followed by the Southeast, which had an index above 60 for the second straight month. The North Central-East and Northeast both grew at a significant pace. The North Central-West and West had more moderate growth.
Plants with more than 250 employees expanded at a robust rate for the second straight month. Facilities with 100-249 employees have grown every month but two since March 2016. Companies with 50-99 employees barely grew after a very strong month in January. Processors with 20-49 employees grew for the fifth time in six months and had an index above 60 for the first time. Processors with fewer than 20 employees expanded for the third straight month.
ABOUT THE AUTHOR: Steven Kline Jr. is part of the fourth-generation ownership team of Cincinnati-based Gardner Business Media, which is the publisher of Plastics Technology. He is currently the company’s director of market intelligence. Contact: (513) 527-8800; email: firstname.lastname@example.org; blog: gardnerweb.com/economics/blog
Editor PickGardner Business Index: January 2017
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