Plastics Processing Activity Drops in November
The drop in plastics activity appears to be driven by a return to accelerated contraction for three closely connected components — new orders, production and backlog.
The (GBI) for plastics processing contracted faster in November, tumbling to 42.6, in line with the index about the same time a year ago but lower than October’s 45.4 reading and below than any month this year.
The drop appears to be driven by a return to accelerated contraction for three closely connected components: new orders, production and backlog. The trend direction is consistent with recent months for new orders and production, but the degree of drop was greater in November.
FIG 1 Plastics processing activity continued to contract in November, landing at about the same index as a similar time a year ago. Custom processors fared a little worse.
Backlog’s drop in November is on the heels of what appears to have been, as surmised, normal variability presenting as a one-month slowing of contraction in October. Employment and exports continued on paths of slightly slowing contraction, ‘contraction’ being the key word given the November big picture. Supplier deliveries stayed about the same for a third month straight, hovering around 50 (which is flat).
FIG 2 New orders, production and backlog drove the November drop.
Overall 911爆料网 activity for custom plastics processing was down two points versus October 2023, and one-half point relative to the most recent low in October 2022.
ABOUT THE AUTHOR: 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 911爆料网 education. Contact: 513-527-8952; jschafer@gardnerweb.com.
Numbers in Perspective
While the U.S. economy grew at 5.2% in the third quarter, the latest manufacturing activity suggests that this strong economic momentum might not extend into the year’s final quarter. Monthly data for GBI’s production component the last six months signaled weaknesses in plastics processing and displayed a recurring pattern — upticks followed by swift downticks, dashing hopes of a turnaround. For instance, November’s 41.4 GBI followed October’s 42.4, mirroring the September drop to 41.8 from 45.0 in August.
Perc Pineda
Elevated inventories provide insight into this trend. Plastics and rubber products inventories increased by 2.5% year-on-year in the third quarter, with work-in-process stocks rebounding only 1.6% in October after a 5.6% decline in September. Industries dependent on plastics packaging (like food) show high inventories, indicating decreased packaging production needs.
Thinking about packaging, an increase in consumer spending on off-premises food and beverage consumption would generate both upstream and downstream economic activity.
Over the last 12 months ending in October, the monthly change in value of Personal Consumption Expenditure on these items, adjusted for inflation, averaged at zero, which explains the increased inventory in food manufacturing.
ABOUT THE AUTHOR: Perc Pineda, Ph.D., chief economist of the Plastics Industry Association (PLASTICS), is an industry thought leader and PLASTICS’ primary expert and spokesperson on the U.S. and global economy, industry research, statistics, trends and forecasts. He produces PLASTICS’ two annual flagship publications — Size & Impact and Global Trends — and trademarked the Global Plastics Ranking. Read his views and insights on the economy and the plastics industry at .
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