Plastics Processing Contraction Continues
Contraction dominated the GBI index for overall plastics processing activity and almost all components, collectively suggesting a slowdown.
The Gardner Business Index (GBI): Plastics Processing closed May at 45.1, down a full two points from April’s index. The index is based on survey responses from subscribers to Plastics Technology. Indices above 50 signal growth; below 50, contraction.
Processing activity contracted again in May for both total plastics processing and custom processing.
Production, new orders, and backlogs contracted faster in May, while exports held their own, contracting in May at about the same rate as April. Employment and supplier deliveries expanded and lengthened, respectively, to lesser degrees in May. Indices for both components landed on the cusp of flat, which means about as many people saw activity for the component going up as saw it going down.
Employment and supplier deliveries activity ended May nearly flat while other components contracted, generally faster than in April.
Overall business activity for custom plastics processing contracted again in May, down 2.5 points from April and continuing a year-long trend of contracting faster than overall plastic processing.
EDITOR’S NOTE: Finding reliable and relevant data to help guide your business is always important, but especially so during challenging economic times. For this reason, the GBI Plastics Processing Index serves as a great tool for making data-driven decisions. Thank you to everyone who has previously completed GBI surveys. Your participation helped increased response in 2021-2022, making the GBI better than ever because of your involvement. Thank you for your time and efforts and for trusting us to provide you with the latest industry and business insights both in the past and in the future.
If you are a North American plastics processor and would like to participate in this research, click here to begin the process by subscribing free to Plastics Technology magazine.
ABOUT THE AUTHOR: Jan Schafer is director of market research for Gardner Business Media, parent company of both Plastics Technology magazine and Gardner Intelligence. She has led research and analysis in several industries for over 30 years. She has a BA in psychology from Purdue University and MBA from Indiana University. She credits Procter & Gamble for 15 years of the best business education. Contact: (513) 527-8952; jschafer@gardnerweb.com.
Numbers in Perspective
Looking at the value of materials and supplies inventories of plastics and products held by manufacturers, the May GBI provides insights into the trajectory of materials and supplies inventories in plastics manufacturing.
After a slight increase in February, the GBI decreased over the following three months. During the same period, materials and supplies inventories in plastics manufacturing moved in a similar downward trend from February to April.
By Perc Pineda
The GBI reflects a slowdown in plastics conversion. In April, the capacity utilization in plastics and rubber manufacturing was 6.1% lower than April 2022, indicating a pullback in manufacturing activity within the industry. Moreover, the Industrial Production Index for plastics product manufacturing published by the Federal Reserve Board has seen a continuous decrease in the past six months on a year-to-year basis, with a 5.3% decrease in April.
Trade data shows that U.S. exports for plastics products totaled $7.6 billion in the first quarter, which was 1.1% higher than the first quarter of the previous year. One factor contributing to this increase was the weakening of the U.S. dollar, which by May was 5.9% lower than in October of 2022.
The current trade growth projection by the World Trade Organization for 2023 is 1.7%, down from 2.7% growth last year. So the uptick in the exports outlook observed in May could prove to be transitory.
ABOUT THE AUTHOR: Perc Pineda, PhD, chief economist of the Plastics Industry Association (PLASTICS), is an industry thought leader and PLASTICS’ primary expert and spokesperson on the U.S. and global economy, industry research, statistics, trends and forecasts. He produces PLASTICS’ two annual flagship publications — Size & Impact and Global Trends — and trademarked the Global Plastics Ranking. Read his views and insights on the economy and the plastics industry at plasticsindustry.org.
.png;maxWidth=300;quality=90;format=webp)
Related Content
Plastics Processing Growth Slows Slightly
May reading for plastics processors is, for the most part, a continuation of what we saw in April.
Read More
Plastics Processing Contracts Again
October’s reading marks four straight months of contraction.
Read More
Processing Megatrends Drive New Product Developments at NPE2024
It’s all about sustainability and the circular economy, and it will be on display in Orlando across all the major processes. But there will be plenty to see in automation, AI and machine learning as well.
Read MoreRead Next
People 4.0 – How to Get Buy-In from Your Staff for Industry 4.0 Systems
Implementing a production monitoring system as the foundation of a ‘smart factory’ is about integrating people with new technology as much as it is about integrating machines and computers. Here are tips from a company that has gone through the process.
Read More
Recycling Partners Collaborate to Eliminate Production Scrap Waste at NPE2024
A collaboration between show organizer PLASTICS, recycler CPR and size reduction experts WEIMA and Conair will seek to recover and recycle 100% of the parts produced at the show.
Read More