With a reading of 53.2, Gardner Business Media’s November survey of plastics processors showed that their business grew for the 12th time in 13 months. This was the first month the Plastics Processors’ Business Index increased to any significant degree since March 2014. But compared with one year ago, the index increased just 0.4% in November. The annual rate of growth decelerated from last month but the rate of change has remained fairly constant for the last five months.
For processors, new orders have now grown for 13 straight months. In November, the rate of growth was faster than in the previous two months. Production has expanded since December 2012. Like new orders, production in November increased more than in the preceding two months. Backlogs contracted for seventh month in a row, but the index was at its highest level since July. Compared with a year ago, the backlog index increased 2.7% last month. The annual rate of change in backlogs decelerated slightly last month. But the rate of growth has been above 10% for three straight months, which indicates that capacity utilization and capital equipment consumption by plastic processors should increase in 2015. Supplier deliveries were lengthening at nearly their fastest rate in two years.
Materials prices increased at a significantly slower rate in November. The rate of increase was the lowest since November 2012. Fortunately for processors, prices received continued to increase at a significant rate, although the rate of increase has slowed in the last two months. Future business expectations made a big jump in November back to their September level.
Facilities with more than 250 employees rebounded strongly in November. Growth increased to a rate similar to the period from July to September. However, processors with 100-249 employees contracted for the first time since February 2014. Plants with 50-99 employees expanded after contracting last month. Processors with 20-49 employees have seen very strong growth in the last two months. While processors with 1-19 employees were still contracting, they had their slowest rate of contraction since July.
The Southeast was the fastest growing region in November. Currently, it has the longest stretch of growth of any of the regions.
Future capital spending plans were above $1 million for just the second time since June. The month-over-month rate of change contracted for the third month in a row. The annual rate of change contracted at an accelerating rate for the second straight month.