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AUG 2016

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AUGUST 2016 16 CompositesWorld BUSINESS INDEX Compared with one year ago, future capital spending plans are up by 43%. 70 60 50 40 30 » With a reading of 43.3, the most recent Gardner Business Index showed that the US composites industry had contracted at a signif- icantly faster rate in the month of June than it had at any refernce point previously in 2016. e decline brought the Index back to the general level recorded in the second half of 2015. New orders contracted for the third month in a row. e new orders subindex had, by the end of June, fallen sharply since March. e production index contracted for the second time in three months as its subindex fell to its lowest level since January of this year. e backlogs index contracted as well, and did so at an accelerating rate for the fourth straight month. e employment figure contracted, too, for the second time in three months, and its subindex fell to its second lowest level since the GBI Composites survey was initiated in December 2011. Despite the moderation in the value of the US dollar, US exports continued to contract in June. Supplier deliveries lengthened for the fifth time in the first half of 2016. e materials prices subindex, as June closed out, had increased dramatically in 2016. Although the rate of increase did slow down in June, the subindex was at its second highest level in the previous 18 months. Prices received decreased for the ninth month in a row. e future business expectations subindex, in June, was fairly flat again, as it had been in four of the preceding five months. For the most part, US composites manufacturers felt the effects of industry contraction. Plants with more than 250 employees contracted for the seventh straight month. eir subindex fell to its lowest level since the survey began. Facilities with 100-249 employees contracted in June after having posted growth in five of the previous six months. Companies with 50-99 employees, however, were the exception: As a group, they posted expansion as June closed out — the third posting of growth during the preceding five months. Facilities with 20-49 employees contracted in June after growing in three of the previous four months. Plants with fewer than 20 employees contracted for a fourth month in a row. e aerospace industry contracted, but it was its first time under 50.0 since January 2016. Although the aerospace industry had performed well for composites fabricators from January through May, the automotive industry, through June, had posted contraction for seven consecutive months. is mirrored motor vehicle and parts consumer spending, which had contracted five of the previous six months. Future capital spending plans, in June, fell to their lowest level of 2016. But, compared with one year earlier, future capital spending plans actually were up by 43%. Month-over-month, they had increased, as June closed out, in three of the previous four months. e annual rate of change, in June, had contracted at a deceler- ating rate since February 2016, which as CW went to press, was a positive sign for the US composites industry. June 2016 — 43.3 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 GBI reading of >50.0 indicates expansion; values <50.0 indicate contraction. 60 50 40 40.2 42.8 38.3 43.9 New Orders Production Backlogs Employment Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 June 16 43.3 GBI JUNE 2016 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16

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