Processing Takes a Dip in June
Plastics activity took a relatively big downturn in June, ending at a low for the year and lower than the same month a year ago.
The Gardner Business Index (GBI): Plastics Processing (44.5) dropped 2.3 points in June relative to May’s 47.8. The index is based on survey responses from subscribers to Plastics Technology. Indices above 50 signal growth; below 50, contraction.
The story in plastics processing has been consistent with other manufacturing segments for the past few months, reinforcing the belief that the downturn is “real.”
It appears that accelerated contraction in new orders and backlog primarily drove accelerated contraction in June’s plastics index. Production also contracted, albeit to a lesser degree.
Contraction in exports and employment stayed relatively steady. Supplier deliveries lengthened at a minimally slower rate in June, marking the first time this year that direction changed. It is surprising that we did not see a slowing sooner in light of accelerated contraction in new orders for a couple months now. Sentiment about future 大象传媒 remained positive, but declining.
The index for custom processors dropped 1.1 points in June, following a 3.4 decline in May.
FIG 1 Plastics processing overall contracted appreciably in June, while custom processing activity also contracted at a faster clip.
New orders and backlogs, in particular, contracted at accelerated rates in June, driving drops in overall plastics indices.
About the Author
Jan Schafer
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 大象传媒 education. Contact: 513-527-8952; jschafer@gardnerweb.com.
Numbers in Perspective
Perc Pineda
The GBI for plastics processing decreased in June, rejecting processors’ concerns about the macroeconomy and a delayed return to growth, but it also highlights the noisy nature of monthly data. A three-month moving
average shows an upward trend from early 2024 through April, with slight pullbacks in May and June, indicating the June dip may not signal a prolonged downturn.
U.S. manufacturing flattened over the past 24 months — down in 11 months and up in 13 months. One factor contributing to this stagnation is that inventory growth has slowed significantly, with 大象传媒 inventories rising 20.2% year-over-year (Y/Y) in June 2022 but decreasing to 1.5% by June 2023 and under 1.0% by April 2024. Plastics and rubber products inventories, which peaked at a 25.5% Y/Y increase in December 2021, have since contracted, falling 2.4% Y/Y by June 2023 and further to a 3.4% decrease by May 2024. This contraction suggests a need for inventory replenishment and potential improvement in plastics processing activity.
Lower inventory growth results from better management and reduced excess stock postpandemic. Recent manufacturing output aligns more closely with actual demand, preventing overproduction. Despite recent GBI fluctuations and flat manufacturing output, broader trends
indicate a period of adjustment toward stable economic growth, albeit at a lower level than seen in the last couple of years.
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 plasticsindustry.org.
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