Plastics Technology

DEC 2018

Plastics Technology - Dedicated to improving Plastics Processing.

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Michael Guckes is the chief econo- mist 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; Learn more about the Plastics Processing Index at STAY AHEAD OF THE CURVE WITH GARDNER INTELLIGENCE Visit the blog at: or email Coming in at 54.1 in October, the Gardner Business Index (GBI) for plastics processing set the average year-to-date reading at 56.1, indicating strong economic conditions. (Values over 50 indicate expan- sion; values below 50 indicate contraction; 50 = no change.) Concerning custom processors in particular, the latest index reading of 57.9 revealed significant expansion. Only six times in the last five years has the index for custom pro- cessors been higher. (The index is based on monthly surveys of Plastics Technology subscribers.) Of the six components that comprise the overall plastics processing index, supplier deliveries, production and new orders lifted the index. Conversely, the index was pulled lower by employ- ment. For the month, only backlogs reported no change from the prior month, while exports reported a third consecutive month of contraction. Gardner Intelligence's review of the index components reveals that supplier deliveries continue to be the most significant driver of the Index. Among the many manufacturing processes that Gardner covers, supply-chain bottlenecks have been frequently cited as an issue limiting production. The strong response by suppliers to resolve this problem in the second and third quarters of 2018 has done much to support higher production levels and address growing backlogs, according to survey participants. While much attention has been given to the impact of changes in trade policies between the U.S. and its top trading partners, less attention has been given to the strengthening U.S. dollar, which has appreciated by roughly 10% against the Chinese Yuan and 4% against the Canadian Dollar in the seven months ending in early November. Index of 57.9 among custom processors tops overall index. Custom Processors Rebound Strongly Gardner Business Index: Plastics Processing Supplier Deliveries Respond to Growing Production Demand The Plastics Processing Index recorded another month of expansion on par with the average growth rate of prior months. Only six times in the last five years has the Custom Processors Index been higher than it was in October. As production increases, supplier deliveries tend to respond in a lagged manner. As the supply network responds to the increased demand for production inputs, processors can expand their production levels to better meet current demand. FIG 1 FIG 2 By Michael Guckes Chief Economist 1/13 7/13 1/14 7/14 1/15 7/15 1/16 7/16 1/17 7/17 1/18 7/18 40 50 60 70 54.1 57. 9 Plastics Processing Custom Processors 1/13 7/13 1/14 7/14 1/15 7/15 1/16 7/16 1/17 7/17 1/18 7/18 40 50 60 70 Supplier Deliveries Production @plastechmag 49 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

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