Processor Business Continues Growth
July’s Index is up nearly 7% from last July. Custom processors report second-highest Index since 2013.
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The Plastics Processing Index for July dipped a bit from June, indicating slowing growth. Faster expansion in new orders than production may in part explain this month’s expansionary backlog reading. But custom processors recorded the second-best month since the survey was started in 2013.
In recent months the Plastics Processing Index has been bolstered by increasing growth in supplier deliveries while most other measures have signaled slowing growth.
The Gardner Business Index for Plastics Processing indicates that processors’ business conditions grew again in July after expanding at their fastest rate in the history of this survey during the first quarter of 2018. (Index values over 50 indicate expansion; values below 50 indicate contraction; an Index of 50 = no change.) The latest reading of 55.9, while below June’s 56.3 value, is up 6.8% from July 2017. Business conditions for custom processors increased to 61, up from 59.7 in June, marking the second-highest Index value for these processors since 2013.
The latest overall reading was driven higher by supplier deliveries, new orders, and production. Employment, exports and backlogs all pulled the index lower. Employment data across most manufacturing industries tracked by Gardner Intelligence posted weaker than expected results in July. Given the currently very low unemployment rate in general—and in manufacturing in particular—Gardner Intelligence believes that low employment readings are not indicative of a decline in the demand for manufacturing labor. Rather, we believe demand is very strong, and low-employment readings represent the difficulty that many manufacturers are experiencing in finding labor for hire at all.
The Plastics Processing Index is calculated by Gardner Intelligence based on monthly survey responses from subscribers of Plastics Technology magazine. Gardner Intelligence is a division of Gardner Business Media, publisher of this magazine.
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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