Custom processors grow for fifth month in seven.

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With a reading of 49.5, the Gardner Business Index showed that the plastics industry contracted at a minimal rate in September. The rate of contraction decelerated in the last two months, but it was the fifth time in six months that the industry contracted.

The good news is that among the industry as a whole, custom processors expanded for the fifth time in the last seven months. The rate of growth for the last three months was relatively weak. Plastics/rubber product manufacturers grew for the second month in a row. The rate of growth was stronger than the one experienced by custom processors.

Among major plastics end markets, electronics grew in September after two months of contraction. But the medical industry contracted for the third time in four months while the automotive industry has contracted since October 2015. 

Overall, the new orders index grew for the second month in a row. New orders generally have grown in 2016, but there does appear to be a decelerating growth trend in the index. The same can be said for the production index, but the deceleration in production seems to be a little slower than for new orders. The backlog index contracted at a decelrating rate for the second month in a row. However, the level of the backlog index was still lower in September than in February through May. 

Employment contracted at a minimal rate for the fourth consecutive month. Exports continued to contract in September, although the index has been on a slightly upward trend since last November. Supplier deliveries lengthened substantially in September as the index climbed to its highest level since February 2015.

Material prices increased for the sixth month in a row. The rate of increase was the fastest since November 2014. Prices received increased in September for the second time in five months. This put that index at its highest level since October 2014.

Future business expectations improved significantly for the second month in a row. In September, that index reached its highest level since February 2015.