Contraction Slowed in August

Gardner Business’ Plastics Processing Index revealed that contraction had slowed in August, registering 48.3 compared to 46.1 for July. (Index readings above 50 indicate expanding activity while values below 50 indicate contracting activity. The farther away a reading is from 50, the greater the change in activity.)

The fact that the Index moved closer to the 50 mark indicates that while business activity still contracted during August, it did so at a relatively slower rate than in the prior month. An analysis of the underlying components of the Plastics Processing Index reveals that production and supplier delivery activity accelerated, while the remaining components experienced some level of activity contraction. Of those that reported contracting, three reported slowing contraction. Only employment contracted at a faster rate in August than in the prior month.

Production activity expanded during the month after posting its first and only 2019 contractionary reading in July. Expanding production activity coupled with a mild contraction in both new orders and export activity resulted in another month of contracting backlogs. August marked the sixth consecutive month of backlog activity contraction; the backlog component is currently the fastest-contracting component of the Plastics Processing Index.

The index is based on surveys conducted monthly of subscribers of Plastics Technology Magazine.