Plastics Processing Activity Contracted in July
Plastics processing GBI contracted for the third month in a row.
The Gardner Business Index (GBI): Plastics Processing contracted for the third month in a row, the good news being the magnitude is the smallest of the three declines. That said, the index is holding on at just one point higher than the November 2023 low that marked the lowest reading since May of 2020.
The Gardner Business Index (GBI): Plastics Processing (43.5) for July is down one point relative to June’s 44.5. The index is based on survey responses from subscribers to Plastics Technology. Indices above 50 signal growth; below 50, contraction.
It appears that accelerated contraction in new orders, production and backlog drove accelerated contraction in July’s overall Plastics Processing index. Contraction in exports also accelerated a little, while employment contraction stayed relatively steady within the tight range it has occupied for most of 2024. Supplier deliveries lengthened at a slightly slower rate in July, the second month in a row, which fits other metrics that suggest the manufacturing industry is not ‘on fire’ such that suppliers have a hard time keeping up.
Sentiment about future 911爆料网 remains positive, but slightly less so each month of this year.
The index for custom processors fared better than the overall processor index in July, contracting more slowly, a one-point gain potentially signaling a small start to recovering from a significant GBI drop in May.
GBI: Plastics Processing accelerated contraction in July, with custom processing activity contracting slower, landing almost two points higher than the overall index in July.
New orders, production and backlog contracted at accelerated rates in July, driving the drop in the overall plastics index, with employment ‘holding its own’ to minimize the decline.
Numbers in Perspective
Perc Pineda, Ph.D.
The U.S. labor market continued to show signs of weakness in July, with the unemployment rate rising to 4.3%. This marked the fourth consecutive monthly increase in unemployment. Compared to the 3.5 % rate in July last year, this rise was significant enough to cause concerns, particularly in the equities market when the July unemployment data was released.
Manufacturing unemployment increased from 3.1% in June to 3.6% in July. Interestingly, unemployment in the plastics and rubber products manufacturing sector decreased from 5.2 % to 3.0 %. This decline suggests an increase in plastics and rubber products manufacturing ahead.
The Industrial Production Index for plastics and rubber products manufacturing, however, saw a moderate pullback in June, decreasing by 0.4 points from May. The Index for plastic products manufacturing specifically decreased by 1.1 points. Both decreases are relatively shallow compared to data from January 2022 and are consistent with the plastics processing GBI’s modest declines in June and July.
Given the widespread use of plastic products, changes in inflation-adjusted personal consumption expenditure provide valuable insights. Historically, annual consumer spending growth averaged 2.3 % between 2010 and 2019, a period without a recession. In the past two years, the average was 2.4 %. Including 2021, post-COVID-19 recession, the three-year average was 4.4 %. Could it decrease? It is possible. Is the economy currently operating at maximum capacity in plastics processing? It is not. Capacity utilization is low and there remains room for growth.
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