Processors' Growth Is Slowing

The Gardner Business Index (GBI) for plastics processing continued its slowing growth trend for yet another month in August. The latest reading of 52.7 was down 2.9% compared with August 2017. (Index values over 50 indicate expansion; values below 50 indicate contraction; an Index of 50 = no change.) Five of the six components of the index moved lower, except for supplier deliveries, which hit a new all-time high. The latest reading was driven higher by supplier deliveries and production. New orders, employment, backlogs and exports all pulled the index lower.

Backlogs contracted for the second time in the last three months as new orders growth slowed faster than production growth. As Gardner Intelligence has indicated in past months, strength in supplier deliveries and employment is likely to signal maturing of the growth phase of the business cycle. Gardner Intelligence believes that current employment readings do not represent a lack of desire to hire new workers, but rather illustrate the problem with a simple lack of supply of available labor, thereby suppressing Gardner’s recent employment (hiring) readings.

The Plastics Processing Index is calculated by Gardner Intelligence based on monthly survey responses from subscribers to Plastics Technology magazine. Gardner Intelligence is a division of Gardner Business Media, publisher of this magazine.