Plastics Processing Expands for 25th Straight Month
February index of 53.3 buoyed once again by a bump in production.
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Both the overall plastics processing (which includes captive operations) and custom processors indices have experienced modest levels of expansion since reaching their cyclical climaxes in 2018.
The early months of 2019 have seen quickening growth in total new orders and by extension backlogs, despite eroding exports since mid-2018.
The Gardner Business Index (GBI) for Plastics Processing Index registered its 25th consecutive month of expansion with a reading of 53.3 in February, For the second straight month, the gain was attributable to growing production. (Values above 50 indicate expansion; values below 50 mean contraction; 50 = no change.) Compared with February 2018, the index was 9.5% lower. Keep in mind, however, that the Plastics Processing Index hit an all-time high that month.
Of the six components used to calculate the Plastics Processing Index, production, supplier deliveries, and new orders lifted the index. In contrast, employment, backlogs and exports pulled it lower. During the month all components—except for exports—expanded.
This year has gotten off to a strong start, with five of the six business components tracked by Gardner Intelligence reporting expansionary conditions. Only exports, which have been generally contracting since shortly after China and the U.S. began placing tariffs on goods, continue to perform weakly, according to survey participants.
The Custom Processors Index for February reported strong growth in new orders, and secondarily by supplier deliveries and production. This marks the first time since July that new orders expanded faster than all other components. Faster expansion of new orders than production resulted in the quickening expansion of backlogs. In addition, custom processors expanded employment at its fastest rate in over six months.
Gardner Intelligence bases the Plastics Processing index on monthly surveys of Plastics Technology’s subscribers. Gardner Intelligence is a division of Gardner Business Media, publishers of this magazine.
ABOUT THE AUTHOR Michael Guckes is the chief economist for Gardner Intelligence, a division of Gardner Business Media, Cincinnati. He has performed economic analysis, modeling, and forecasting work for nearly 20 years among a wide range of industries. He received his BA in political science and economics from Kenyon College and his MBA from Ohio State University. Contact: (513) 527-8800; mguckes@gardnerweb.com. Learn more about the plastics processing Index at gardnerintelligence.com.
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