Processing Takes a Dip in June
Plastics activity took a relatively big downturn in June, ending at a low for the year and lower than the same month a year ago.
The Gardner Business Index (GBI): Plastics Processing (44.5) dropped 2.3 points in June relative to May’s 47.8. The index is based on survey responses from subscribers to Plastics Technology. Indices above 50 signal growth; below 50, contraction.
The story in plastics processing has been consistent with other manufacturing segments for the past few months, reinforcing the belief that the downturn is “real.”
It appears that accelerated contraction in new orders and backlog primarily drove accelerated contraction in June’s plastics index. Production also contracted, albeit to a lesser degree.
Contraction in exports and employment stayed relatively steady. Supplier deliveries lengthened at a minimally slower rate in June, marking the first time this year that direction changed. It is surprising that we did not see a slowing sooner in light of accelerated contraction in new orders for a couple months now. Sentiment about future business remained positive, but declining.
The index for custom processors dropped 1.1 points in June, following a 3.4 decline in May.
FIG 1 Plastics processing overall contracted appreciably in June, while custom processing activity also contracted at a faster clip.
New orders and backlogs, in particular, contracted at accelerated rates in June, driving drops in overall plastics indices.
About the Author
Jan Schafer
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 earned a bachelor’s degree in psychology from Purdue University and an MBA from Indiana University. She credits Procter & Gamble for 15 years of the best business education. Contact: 513-527-8952; jschafer@gardnerweb.com.
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