Plastics Technology - Dedicated to improving Plastics Processing.
Issue link: http://pty.epubxp.com/i/707262
With a reading of 46.8, Gardner's Plastics Processors' Business Index contracted in June for the second time in three months. The index showed that the processing market has been on a downward trend since March. While custom processors, which are mostly injection molders for the purposes of our monthly survey, have had just one month of growth since June 2015, plastic/rubber product manu- facturers other than injection molders have expanded significantly for four straight months. New orders contracted for the second time in three months, falling significantly since their peak in March. Also, production has contracted twice in the last three months, though the downward trend has not been as steep. While the backlog index had contracted at a steady rate for four months, it dropped notably in June. The employment index contracted for the first time since February. Despite the moderation in the value of the dollar, exports continued to contract. However, the export index generally has improved since November 2015. Supplier deliv- eries lengthened for the fifth month in a row. Material prices increased for the third month in a row. Those three months have seen the fastest increase in material prices since November 2014. Prices received decreased after increasing for just one month in May. The general trend in prices received has improved steadily since June 2015. The future business expecta- tions index fell to its lowest level since December 2015. Processors with more than 250 employees contracted for the first time since January. Plants with 100-249 employees expanded for the fourth month in a row. Facilities with 50-99 employees expanded for the seventh straight month, with an index above 55 in each of the last four months. Companies with 20-49 employees expanded for the third time in five months. The index at processors with 1-19 employees continued to contract, as it has since February 2015. The Southeast was the fastest growing region for the second month in a row; it has grown in five of the last six months. The Northeast also grew in June for the fifth consecutive month. Future capital spending plans fell below $1 million/plant for the first time in three months. However, they increased 46% from the same month a year ago. This was the fifth time in seven months that future spending plans grew versus the same month a year ago. As a result, the annual rate of change increased 1.2%, which was the first month of growth since September 2014. But plants with 100-249 employees expand for fourth straight month. Steve Kline Jr. Dir. Market Intelligence ABOUT THE AUTHOR: Steven Kline Jr. is part of the fourth-generation ownership team of Cincinnati-based Gardner Business Media, which is the publisher of Plastics Technology. He is currently the company's director of market intelligence. Contact: (513) 527-8800; email: skline2@gardnerweb.com blog: gardnerweb.com/economics/blog SUB- INDICES JUNE. MAY CHANGE DIRECTION RATE TREND b New Orders 45.4 56.8 -11.4 Contracting From Growing 1 Production 47.9 57.2 -9.3 Contracting From Growing 1 Backlog 39.9 45.2 -5.3 Contracting Faster 17 Employment 48.3 52.8 -4.5 Contracting From Growing 1 Exports 46.9 48.7 -1.8 Contracting Faster 18 Supplier Deliveries a 52.1 52.0 0.1 Lengthening Faster 5 Material Prices 57.1 58.6 -1.5 Increasing Less 3 Prices Received 47.9 50.4 -2.5 Decreasing From Increasing 1 Future Business Expectations 67.6 70.2 -2.6 Improving Less 54 Plastics Processors' Business Index 46.8 52.1 -5.3 Contracting From Growing 1 a Refers to leng th of deliver y times. b How many months each component has been running in the same direction. June's Index: 46.8 Gardner Business Index—Plastics Processing: June 2016 INDIVIDUAL COMPONENTS Plastics Processors' Business Index 60 55 50 45 40 FEB 15 MAR 15 APR 15 MAY 15 JUNE 15 JULY 15 AUG 15 SEPT 15 OCT 15 NOV 15 DEC 15 JAN 16 FEB 16 MAR 16 APR 16 MAY 16 JUNE 16 Values below 50 indicate contraction Values above 50 indicate growth 46.8 @plastechmag 65 Plastics Technology YO U R B U S I N E S S G A RDNER BUSINE S S INDE X : PL A S T IC S PRO CE S SING