March 2017 Index: 55.1

With a reading of 55.1, Gardner’s Plastics Business Index grew for the third month in a row in March and at its fastest rate since January 2015. The index has grown at a slightly faster rate each month in 2017. Custom processors have experienced consistently robust growth each month in 2017. Plastics/rubber product manufacturers have grown in seven of the last eight months.

New orders and production both grew for the third month in a row. And both indices grew at a slightly slower rate than in February. The backlog index increased for the second time in three months. The rate of growth in March was the fastest since February 2012. The trend in the backlog index indicated that capacity utilization should increase in 2017. Employment increased for the third straight month. Exports have contracted at an accelerating rate since October 2016. Supplier deliveries lengthened at their fastest rate since February 2015.

Material prices increased at a significantly accelerating rate in each of the last four months and March saw the fastest increase in material prices since the survey began in December 2011. Prices received increased for the sixth time in seven months and 40 have steadily improved since June 2015. Future business expectations remained strong, although they have dropped somewhat in each of the last two months.

Medical, machinery/equipment, automotive, and electronics/ computers/telecommunications markets each had its own index above 60 in March. These industries have grown for at least the last three months.

The North Central-West grew the fastest in March. The North Central-East has had an index of more than 55 for three straight months. The Northeast and Southeast continued their long runs of growth. The South Central grew for the second straight month. The West contracted for the third time in four months.

Plants with more than 250 employees expanded at a robust rate for the third month. Facilities with 100-249 employees have grown in every month but two since March 2016. Companies with 50-99 employees had an index above 58 for the second time in three months. Processors with 20-49 employees grew for the sixth time in seven months. Processors with fewer than 20 employees contracted after three months of modest growth.

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