Index Nears Historic Growth
Gardner Business Index: Year-to-date average is nearly 54.
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The Plastics Processing Index signaled increasing expansion in October, growing faster than during the third quarter. Strong readings in production, new orders, employment, and supplier deliveries have been critical to its success throughout the year. The index just for custom processors was lower than for processors overall in October.
A recent uptick in new orders has surpassed the rate of growth in production. The relatively faster growth of new orders was first realized during the second quarter of 2017 and should cause backlog readings to increase in the near future.
Registering 54.6 for October, the Gardner Business Index (GBI): Plastics Processing increased during the month, moving closer to the three-year record of 56.2 set in May. The latest reading brings the index’s 2017 year-to-date average to 53.9, besting the third-quarter average after revisions.
For the year-to-date and 12-month periods, the index is up approximately 10.8% and 8.6%, respectively. Gardner Intelligence’s review of the underlying data for the month indicates that supplier deliveries, employment, and new orders lifted the business index higher, while exports, production, and backlog pulled the index lower.
After posting largely contractionary readings throughout 2017, exports in October reported their strongest expansion since 2014. October’s backlog data signaled further contraction; backlogs have shown faster rates of contraction as we moved through the calendar year.
The GBI index for only custom processors moved lower for a fifth straight month, after reaching a multi-year high in May. The reading was lifted higher by data on supplier deliveries, new orders, and production. Throughout the year, custom processors have reported a slower rate of growth than the overall processing industry, which includes captive operations.
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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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