January 2017—54.7

With a reading of 54.7, the Gardner Plastics Business Index showed that industry grew for the first time since October 2016 and at its fastest rate since January 2015. In general, the industry has trended up since July.

Both new orders and production 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 the fastest since January 2015. The backlog index grew for the first time since January 2015. This indicates

that capacity utilization should increase in 2017. Employment increased after one month of contraction. 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 two months. The index was at its highest level since February 2014. Prices received increased for the fourth time in five months. The rate of increase was the fastest since October 2014. After a huge jump in November due to the election results, the future business expectations index increased again in January, when the index was at an all-time high.

The automotive industry continued its strong growth for the third month in a row. Electronics grew significantly for the fourth time in five months. And the medical index grew for the first time since July 2016.

Plastics/rubber processors had strong growth in five of the last six months. Custom processors grew at their fastest rate since March 2016.

Plants with more than 250 employees expanded for the first time since August 2016. Facilities with 100-249 employees have grown every month but two since March 2016. Companies with 50-99 employees had an index above 60 for the first time since May 2016. Processors with 20-49 employees grew for the fourth time in five months. Processors with fewer than 20 employees expanded for the second straight month.

The Southeast was the fastest growing region for the third consecutive month and has grown for the last nine months. Its index in January was easily its highest since the survey began in December 2011. The North Central-East also grew at its fastest rate since the survey began. The Northeast grew in four of the last five months. The North Central-West grew for the first time since June 2015. Both the West and South Central contracted.

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: skline2@gardnerweb.com; blog: gardnerweb.com/economics/blog