Index Expanded Modestly in May

The Gardner Business Index (GBI) for Plastics Processing moderated to 51 in May. Compared with May 2018, the Index is 11.3% lower. (Index values above 50 indicate expansion, a value of 50 represents no change, and values below 50 indicate activity is contracting.) New orders led the Index higher, followed by employment, production and supplier deliveries. The Index was pulled lower by exports and backlogs, but only backlogs actually contracted during the month.

The month’s data presented a few indications that the plastics processing industry continues to moderate its growth rate since experiencing in 2018 its best year since Gardner began tracking data in 2011. For the first time since new orders and production spiked in early 2018, the growth of supplier deliveries fell below the growth level of both new orders and production. The implication of this is that the supply chains, which had been racing to respond to the early-2018 surge in new orders, have now fulfilled those upstream needs and are now positioning to maintain healthy inventories.

With this report Gardner Intelligence has refined how the Custom Processors Index is calculated in order to better track this segment of the industry. Employment and supplier deliveries were the top supporting components of the Index. But an unusually steep contraction in backlog activity dragged the Index reading below 50.