CompositesWorld
Issue link: https://cw.epubxp.com/i/532917
JULY 2015 12 CompositesWorld BUSINESS INDEX 70 60 50 40 30 » In May 2015, the CompositesWorld Business Index showed an overall reading of 48.6, indicating that the US composites industry contracted for a second month in a row and that the rate of contraction had increased compared with April. Te Index was at its lowest level in May since August 2013. Compared with one year earlier, it contracted 14.6%, which was the fastest rate of contrac- tion since December 2012. On an annual basis, the industry contracted in May for the frst time since January 2014. New orders in May contracted for the second month in a row. Tis ended a US trend of steadily accelerating growth in new orders that had begun back in July 2014. Production increased in May after being fat in April. Generally, production had been stronger than new orders, which had led to contraction in backlogs. Other than in December 2014, the backlog subindex had hovered around 44. Compared with one year earlier, backlogs had performed quite poorly in the fve months preceding June 1. Te annual rate of change in backlogs had contracted faster in the two preceding months. Te trend to that point indicated that capacity utilization in the industry would see slower growth or might contract during the remainder of 2015. Employment in the US composites industry was virtually unchanged in May. Exports had contracted since July 2014. Supplier deliveries lengthened again in May, at about the same rate as they had since January 2014. In April and May, material prices increased at a faster rate than they had the previous four months. However, material price increases had been much more subdued over that same six-month period than at any other time since the fourth quarter of 2012. Prices received decreased for the frst time since October 2014. Te US composites industry's future business expectations subindex had been bouncing up and down quite a bit since the summer of 2014, but in May, that subindex was at its lowest level since October 2014 but also was right at its historical average. All but the largest US composites fabricators contracted in May. Companies with more than 250 employees showed signifcant improvement in their May subindex, increasing to 55.5 from 45.8. Facilities with 100-249 employees moved in the opposite direction as their subindex dropped to 49.1 from 64.2. Fabricators with 20-99 employees contracted for the second month in a row. By the end of May, fabricators with fewer than 20 employees had contracted every month but one since June 2014. Te North Central – East was the fastest growing region in May. It had expanded in May for fve of the preceding six months. Te only other region to grow was the North Central – West, which had done so in six of the previous eight months. Te West, which was the fastest-growing region in April, saw its subindex drop to 47.7 from 57.4. Te Northeast contracted signifcantly in April and May and in fve of the preceding six months. Future capital spending plans had been below average in March and April and were, again, in May. Compared with one year earlier, they had contracted more than 20% in each of those months. Te annual rate of change had contracted at an accelerating rate during that period. Spending plans in the US composites industry were contracting, in May, at an annual rate of 14.1%. CW Business Index at 48.6 – US industry contraction accelerates Steve Kline, Jr., is the director of market intelligence for Gardner Business Media Inc. (Cincinnati, OH, US), the publisher of CompositesWorld magazine. He began his career as a writing editor for another of the company's magazines before moving into his current role. Kline holds a BS in civil engineering from Vanderbilt University and an MBA from the University of Cincinnati. skline2@gardnerweb.com A CWBI reading of >50.0 indicates expansion; values <50.0 indicate contraction. 60 50 40 48.5 51.6 43.3 50.5 New Orders Production Backlogs Employment May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 48.6 CWBI MAY May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15