Plastics Processing Held Steady in March
Custom processors, in particular, fared better in Q1, as did processors with 100+ employees.
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FIG 1 The Plastics Processing and Custom Processors indices both show modest business expansion during March. Production was the leading component for both indices during the month.
FIG 2 According to survey respondents, new orders during 2019 have been greater among large firms (more than 100 employees) than small firms (fewer than 50 employees). Export demand is one factor contributing to this divergence in new orders.
The Gardner Business Index (GBI) for Plastics Processing ended March with a reading of 53.3, bringing the average reading for the first quarter of 2019 to 53.7. (Index values above 50 indicate expansion; values below 50 show contraction, and a value of 50 represents no change.) Compared with March 2018, when the Index was near its all-time high, readings have fallen 7.9%. The Index shows custom processors experienced higher activity during the first quarter of the year, with a quarterly average index of 54.6.
Analysis of the underlying components of the GBI Plastics Processing Index reveals that production, supplier deliveries and new orders moved the Index higher. Conversely, the Index was pulled lower by contracting exports and backlogs.
Total new orders activity during the first quarter of the year grew disproportionately. Larger processors (more than 100 employees) experienced significantly greater new orders activity than processors with fewer than 50 employees . One reason for this variation has come from contracting exports among smaller firms, while larger firms have experienced increasing export activity during 2019.
Gardner Intelligence bases the Plastics Processing index on monthly surveys of Plastics Technology’s subscribers. In March of 2019, the Custom Processors Index was modified to more accurately represent this segment of the plastics manufacturing industry. Historical values have been updated retroactively to reflect this change. Gardner Intelligence is a division of Gardner Business Media, publishers of this magazine.
ABOUT THE AUTHOR Michael Guckes is 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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