Processing Index Finishes 2017 Strongly
December’s reading of 55.5 was second highest of 2017.
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The Plastics Processing Index ended December and the year on a positive note. The strength of new orders suggests that the industry is likely to experience a strong start to 2018.
Exports and new orders expanded sharply in December. When new orders growth exceeds production growth, this is typically associated with short-term increases in backlogs and/or exports.
Registering 55.5 for December, the Gardner Business Index (GBI): Plastics Processing closed 2017 at its second highest reading of the year. December’s value put the Plastics Processing Index at 53.9 for all 2017, which is only slightly lower than the record figure of 54.6 set in 2014. The index is computed based on survey results from subscribers of Plastics Technology Magazine.
December’s reading was the second highest in a calendar year that experienced volatile month-to-month fluctuations. Compared with the same month a year ago, December’s index was up approximately 11.6%. Gardner Intelligence’s review of the underlying data for the month indicates that new orders, production, supplier deliveries, and exports lifted the business index higher while employment and backlogs pulled the index lower. No components of the Index contracted during the month. The December data showed a significant positive change in both new orders and exports. One surprise in the monthly data was the strength of exports, which helped lift the overall Plastics Processing Index.
Among custom processors specifically, the GBI increased in December to end the year slightly above the index’s calendar-year average. Compared with the broader Plastics Processing Index, custom processors reported slightly lower growth in 2017, but still had a very solid year when measured against their results of past years.
ABOUT THE AUTHOR: Michael Guckes is the 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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