March Growth Fastest in Two Years
Processing market has expanded four of the last five months.
With a reading of 58.1, Gardner Business Media’s exclusive Plastics Processors’ Business Index showed that the processing market expanded for the fourth time in five months. In fact, the industry grew at its fastest rate since February 2012. Moreover, the March index was the second highest since the index began in December 2011. Compared with a year ago, the index was 9.2% higher. This is the fifth consecutive month that the index has come in higher than it was one year ago. The annual rate of change has grown at an accelerating rate in the last two months.
New orders increased for the fifth straight month. The rate of growth in new orders increased dramatically, reaching its second fastest rate of growth since December 2011. Production also expanded much faster in March. This was the fastest rate of growth in production since March 2012. Backlogs increased for the first time since March 2012. The trend in backlogs suggests that capacity utilization and capital spending should increase during the remainder of 2014. Employment increased at its fastest rate in the 27-month history of the index. Exports continued to contract but did so at their slowest rate since July 2012. Supplier deliveries lengthened at a similar rate as last month.
Material prices continued to increase dramatically, although the rate of increase slowed slightly from February. Prices received by processors increased by a relatively high rate in March. This is the third increase in four months for prices received, but the rate of increase is much lower than that for material prices. Future business expectations continued to move higher, reaching their second highest level in the history of the index.
For the first time since the index began in December 2011, every plant-size category saw business expand in March. The rate of growth at plants with more than 50 employees is still noticeably faster than that for other plants. And the growth rate at processors with 20-49 employees is still significantly faster than processors with 19 or fewer employees. However, this was the first month of growth for the smallest facilities since May 2013 and just the second month of their growth since July 2012.
Of the six regions with significant plastics processing activity, all grew in March, with a minimum index of 55. The fastest growing region was the East North Central, up for the sixth time in seven months. The Middle Atlantic region grew for the first time since September 2013.
Average per-plant future capital spending plans were above $1 million for the first time in 2014. Compared with a year ago, capital spending plans increased 13.5%. This was the third month in a row of accelerating growth. The annual rate of change remains at a high rate of growth, near 45%.
Related Content
Plastics Processing Activity Drops in November
The drop in plastics activity appears to be driven by a return to accelerated contraction for three closely connected components — new orders, production and backlog.
Read MorePlastics Processing Growth Slows Slightly
May reading for plastics processors is, for the most part, a continuation of what we saw in April.
Read MorePlastics Processing Continued Contraction in April
Despite some index components accelerating and others leveling off, April spelled contraction for overall plastics processing activity.
Read MoreRead Next
Lead the Conversation, Change the Conversation
Coverage of single-use plastics can be both misleading and demoralizing. Here are 10 tips for changing the perception of the plastics industry at your company and in your community.
Read MoreWhy (and What) You Need to Dry
Other than polyolefins, almost every other polymer exhibits some level of polarity and therefore can absorb a certain amount of moisture from the atmosphere. Here’s a look at some of these materials, and what needs to be done to dry them.
Read MoreProcessor Turns to AI to Help Keep Machines Humming
At captive processor McConkey, a new generation of artificial intelligence models, highlighted by ChatGPT, is helping it wade through the shortage of skilled labor and keep its production lines churning out good parts.
Read More