Plastics News Research just released the results from our Business Monitor survey for the first quarter, and this latest batch of information is both illuminating and encouraging.
The Plastics News Business Monitor Index for the first quarter is 104.3. This indicates the overall activity level for plastics processors expanded in the latest three months when compared with the previous quarter (a value above 100 indicates an increase).
There were strong gains in new orders, production levels and employees. These gains were partially offset by decreases in the categories of export orders, prices received and backlogs.
At first glance, the 104.3 score suggests that the recent uptrend for plastics processors decelerated in the first quarter compared with the fourth quarter of 2014, when our index value was 107.8. This deceleration would be consistent with other indicators of U.S. manufacturing activity so far this year. The latest data from the Federal Reserve Board indicates that the total U.S. output of manufactured products has been flat for the past two quarters.
And there are several reasons why the manufacturing sector has plateaued in recent months: severe winter weather; labor problems at West Coast ports; declining activity in the oil patch resulting from a drop in the price of crude oil; and perhaps most importantly, a decrease in export demand due to the sharp increase in the value of the dollar.
Plastics processors are no doubt affected by these trends in the macro-level manufacturing indicators. But here is where the story told by our Business Monitor survey gets interesting.
Plastics outperforming manufacturing