Processing Market Growth Slows in May
Plastics processing reported slowing growth across all measures of activity in May
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The Gardner Business Index (GBI) for plastics processing in May fell below 60 for the first time since February to close at 59.6. Five of the six measures of business activity fell from their prior-month readings while remaining above 50; such changes indicate continued expansion but at a slowing rate. The one exception was export orders, which signaled no change with a reading of 50 for the month.
Data reported by just custom processors told a similar story; custom processors also indicated no change in export activity. A rising proportion of both processors overall and custom shops in particular reported stable or even quickening supplier order-to-fulfillment scheduling for the first time since mid-2020. If this directional change endures in the future, then May could signal the start of a much-needed normalization of the plastics industry’s supply chain.
FIG 1 The plastics processing market reported slowing expansion for a second consecutive month. While all measures of business activity moved lower, many remain near their pre-pandemic highs.
May’s data registered the fourth consecutive month in which new orders activity outpaced production. The persistent disparity between supply and demand has resulted in a quickly growing proportion of processors indicating rising backlog levels throughout the year to date. Each backlog reading since February 2021 has exceeded the pre-pandemic record high in 2018.
FIG 2 Early indications of a possible turn of events in supply chains has had no perceivable impact on rising material prices. Most surveyed participants report that they are experienced rising material input costs in May as well as in other recent months.
EDITOR’S NOTE: Finding reliable and relevant data to help guide your business is always important, but especially so during challenging economic times. For this reason, the GBI Plastics Processing and Custom Processing Indices serve as a great tool for making data-driven decisions. Thank you to everyone who has previously completed GBI surveys. Your participation helped increased response counts by 15% in 2020, making the GBI better than ever because of your involvement. Thank you for your time and efforts and for trusting us to provide you with the latest industry and business insights both in the past and in the future.
If you are a North American plastics processor and would like to participate in this research, click here to begin the process by subscribing free to Plastics Technology magazine.
ABOUT THE AUTHOR: Michael Guckes is chief economist and director of analytics for Gardner Intelligence, a division of Gardner Business Media, Cincinnati. He has performed economic analysis, modeling, and forecasting work for more than 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.
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