Processing market has expanded four of the last five months.

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With a reading of 58.1, Gardner Business Media’s exclusive Plastics Processors’ Business Index showed that the processing market expanded for the fourth time in five months. In fact, the industry grew at its fastest rate since February 2012. Moreover, the March index was the second highest since the index began in December 2011. Compared with a year ago, the index was 9.2% higher. This is the fifth consecutive month that the index has come in higher than it was one year ago. The annual rate of change has grown at an accelerating rate in the last two months.

New orders increased for the fifth straight month. The rate of growth in new orders increased dramatically, reaching its second fastest rate of growth since December 2011. Production also expanded much faster in March. This was the fastest rate of growth in production since March 2012. Backlogs increased for the first time since March 2012. The trend in backlogs suggests that capacity utilization and capital spending should increase during the remainder of 2014. Employment increased at its fastest rate in the 27-month history of the index. Exports continued to contract but did so at their slowest rate since July 2012. Supplier deliveries lengthened at a similar rate as last month.

Material prices continued to increase dramatically, although the rate of increase slowed slightly from February. Prices received by processors increased by a relatively high rate in March. This is the third increase in four months for prices received, but the rate of increase is much lower than that for material prices. Future business expectations continued to move higher, reaching their second highest level in the history of the index.

For the first time since the index began in December 2011, every plant-size category saw business expand in March. The rate of growth at plants with more than 50 employees is still noticeably faster than that for other plants. And the growth rate at processors with 20-49 employees is still significantly faster than processors with 19 or fewer employees. However, this was the first month of growth for the smallest facilities since May 2013 and just the second month of their growth since July 2012.

Of the six regions with significant plastics processing activity, all grew in March, with a minimum index of 55. The fastest growing region was the East North Central, up for the sixth time in seven months. The Middle Atlantic region grew for the first time since September 2013.

Average per-plant future capital spending plans were above $1 million for the first time in 2014. Compared with a year ago, capital spending plans increased 13.5%. This was the third month in a row of accelerating growth. The annual rate of change remains at a high rate of growth, near 45%.