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12/28/2016 | 2 MINUTE READ

November Index—48.2

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Despite drop, signs are positive for 2017. Future business expectations are way up.

With a reading of 48.2, Gardner’s Plastics Industry Business Index contracted after just one month of growth. When stacked up against the results from November of last year, however, the index has increased. In fact, the index over the last four months of 2016 was higher than in the corresponding period in 2015. This is a positive sign for the plastics industry in 2017.

New orders and production decreased for the first time since July. The backlog index fell back under 40 in November. But compared with one year ago, the backlog index has increased in six of the last eight months. This indicated that capacity utilization at processors should increase very soon. Employment increased at an accelerating rate for the second month in a row. Exports continued to contract, but they contracted at a minimal rate in the last two months. Supplier deliveries have lengthened since February 2016. 

Materials prices continued to increase at a significant rate in November. However, the rate of increase decelerated this month. Prices received decreased after increasing for the last two months. Since June 2015, the prices received index has trended up steadily. Future business expectations skyrocketed in November. The index jumped more than 12 points to 79.1, which was its highest level since March 2014.

Given the proximity of the survey to the presidential election, it would seem reasonable to conclude that the plastics industry is bullish on President Trump.

The automotive index was 58.3 in November, which was the industry’s first month of growth since September 2015. Other manufacturing, which comprises a variety of consumer and durable goods markets, grew at an accelerating rate for the second month in a row. Electronics was flat after two very strong months of growth. Custom processors contracted at an accelerating rate for the second month in a row. Plastic/rubber product manufacturers overall contracted after three months of solid growth.

The Southeast region grew at the fastest rate for the sixth time in the last seven months. The region has grown in 10 of the last 11 months. The West was the only other region to grow in November. The Northeast contracted for the second time in four months.

Plants with more than 250 employees have not grown since August 2016. Facilities with 100-249 employees grew for the eighth time in nine months. Companies with 50-99 employees contracted for the first time since November 2015. Processors with 20-49 employees grew for the third straight month. Processors with fewer than 20 employees have contracted since January 2015. 

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 


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