CompositesWorld
Issue link: https://cw.epubxp.com/i/866813
SEPTEMBER 2017 14 CompositesWorld GARDNER BUSINESS INDEX: COMPOSITES Production, historically associated with New Orders, remained robust at 57.0. » e Gardner Business Intelligence (GBI) Composites Business Index fell to 52.8 in July, pulling down the year-to-date average reading to 54.3. A comparison of the previous three months of readings to the same three months a year earlier showed an increase in the Composites Business Index of 13.7%. Additionally, the Index was up 8.2% from July, a year ago. Production, Employ- ment, and Supplier Deliveries applied upward pressure on the July Index reading but sagging Exports, New Orders and Backlogs subindices ultimately pulled the Index lower. New Orders and Production Registering 49.2, the July New Orders reading fell into contrac- tion territory. is was a surprise, given that average New Orders readings between January and June, this year, averaged a robust 57.1. e three-month average ending in July was 53.1, considerably better than the average of 46.9 recorded for the same period in 2016. e Production subindex, which typically closely trends the movement in New Orders remained a robust 57.0 in July, down only fractionally from June. Because of these diver- gent readings over the previous two months, the spread between New Orders and Production in July was greater than it had been in more than five years. is gap might be responsible, in part, for the significant decline in the Backlogs reading, assuming the strong Production and weak New Orders figures resulted in processors completing backlog work. e GBI team closely monitors the Backlogs reading because it is considered a bellwether of capacity utilization and, ultimately, consumables. Although the July Backlogs reading of 48.3 was disap- pointing, it is still 7% above the reading recorded a year ago in July 2016. Additionally, recent data released from the National Marine Manufacturers Assn. (Chicago, IL, US) show significant growth in several of its watercraft categories. Although this industry was significantly impacted by the 2007-2009 Great Recession, a resur- gent marine market is expected to generate greater demand for the production of composite products. Exports At 50.4, the Exports subindex recorded in July its first reading indicating expansion since January 2017. Exports readings have averaged 49.4 year-to-date after coming off a multi-year high at the end of 2016. Between the end of December 2016 and July 2017, the value of the US dollar has fallen 6.1%, making US exports slightly less expensive abroad. Prices Between December 2016 and April of this year, readings for Material Prices indicated strongly accelerating input costs among composite products manufacturers. By the end of April, the readings for Material Prices had increased by approximately 19% while Prices Received readings increased by only 2%. However, between May and the end of July, Material Prices readings fell significantly, with the July reading of 63.5 reversing most of the recent increase. July 2017 — 52.8 Michael Guckes is the chief economist for Gardner Business Intelligence, a division of Gardner Business Media (Cincinnati, OH US). He has performed economic analysis, modeling and forecasting work for nearly 20 years among a wide range of industries. Michael received his BA in political science and economics from Kenyon College and his MBA from Ohio State University. mguckes@gardnerweb.com