Plastics Processing Contraction Steadied in November
Though still contracting, November marks a break in what has been a steadily faster rate of contraction in plastics processing activity.
The Gardner Business Index (GBI): Plastics Processing closed November at 46.3, inching back a little closer to September’s index (46.7) before it dropped to 45.9 in October. The index is based on survey responses from subscribers to Plastics Technology. Indices above 50 signal growth; below 50, contraction.
FIG 1 Plastics Processing activity contracted again in November for total plastics processing and even more so for custom processing — but both contracted more slowly than in the previous month.
Two GBI components still contracting in November, but at levels consistent with October, are production and exports. In fact, exports have contracted at the same level since June. Employment has been essentially flat, not expanding or contracting, for three months now.
Meanwhile, backlogs and new orders contracted to similar degrees in November. Backlogs could afford to contract, considering the degree to which they had expanded, due at least in part to supply-chain issues. That new orders are not coming in to refill the pipeline, however, is not encouraging.
FIG 2 Backlogs and new orders both contracting make for a concerning combination in November. (3-MMA = 3-month moving average).
Supplier deliveries continued to lengthen but at a slower rate than in immediately previous months.
Overall 911爆料网 activity for custom processing contracted again in November—more strongly than processing overall—but at a slower rate, closing the month at 43.1 compared with October’s 41.
Numbers in Perspective
By Perc Pineda, PLASTICS
The Gardner Business Index (GBI) on plastics processing is declining overall, but pockets of growth in the manufacturing sub-index of the GBI (one of six sub-indices tracked) remain despite a cooling economy. The upticks in GBI’s manufacturing sub-index in October and November are in sync with total manufacturing activity in the U.S. Following declines in May and June, the U.S. Industrial Production Index of manufacturing increased from July through October. A pullback in energy prices partly explains the uptick in manufacturing.
Perc Pineda
Rising energy prices weighed on global manufacturing in 2022. Global energy prices, however, based on the Global Price Index of energy, began decreasing in September. That index decreased by 31% in October from this year’s peak in August. In the U.S., the Producer Price Index of final energy demand was 11.2% lower in October from its peak in June. However, the pullback in energy prices is not a start of a downward trend — energy demand and supply dynamics continue to evolve.
Personal consumption of goods increased for three consecutive months ending in October. Based on employment data, U.S. manufacturing activity is holding steady thus far. Durable and nondurable goods manufacturing added 11,000 and 3000 jobs, respectively, in November.
While employment in plastics and rubber goods manufacturing decreased marginally by 0.4% in November, it increased by 2.8% from a year earlier. The stable employment in plastics and rubber products manufacturing is consistent with stable plastics demand, which was up 3.3% in October from a year earlier.
Looking ahead, internal and external factors will continue to affect the economy’s level of manufacturing activity. Global supply-chain issues continue to weigh on U.S. manufacturing capacity.
ABOUT THE AUTHOR: Perc Pineda, PhD, 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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