Plastics Processing Ends Best Six-Month Period in Recent History
June 2018’s reading of 56.3 pulls half-year index to 57.1.
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The Plastics Processing Index set several records for growth in the first half of the year with an average reading of 57.1. The largest growth in the index came from supplier deliveries and employment.
The primary drivers of the Plastics Processing Index shifted from new orders and production to supplier deliveries and employment. If future months indicate the same change, this may indicate a maturing of the current business cycle.
With a reading of 56.3, the Gardner Business Index (GBI): Plastics Processing revealed slowing growth in June after registering several all-time high records earlier in the year. During the first half of 2018 the Plastics Processing Index averaged 57.1, the best six-month performance in the six-and-a-half-year history of the index, which is calculated based on monthly surveys sent to subscribers of Plastics Technology magazine The latest reading is up 6.6% from June 2017. It was driven higher primarily by employment and supplier deliveries, followed by production and new orders. Exports and backlogs all pulled the index lower. This suggests that supply-chain and production mechanisms are being expanded to handle greater levels of orders. Since the beginning of 2017, the average new-orders reading of 58.5 represents the highest average reading for any 18-month period since at least 2012. Unexpectedly, backlog readings, which have been strongly expansionary since February, issued their first contractionary reading since late 2017.
The June index among only Custom Processors fell slightly to from 59.9 to 59.7, suggesting that business conditions are still well above average.
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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