Composites Index jumps five points to an all-time high
Volatile March survey finds troubled supply chains and strong demand.
The Composites Fabricating Index set a new all-time high due to elevated supplier delivery, new orders and production readings.
The GBI: Composites Fabricating Index rose more than five points in March to close at a new all-time high of 63.7. The month’s gains were broad-based. Supplier delivery, new orders, production and backlog activity all reported quickening expansion. Slowing the Index’s ascent were employment activity, which registered decelerating growth, and a contraction in export activity.
Supply chain difficulties are restricting production which, in the face of strong demand, has caused a meteoric rise in backlog activity.
New orders and production readings maintained a nearly five-point spread which was first observed in February. During the fourth quarter of 2020 through January, fabricators reported modestly contracting backlog activity. Since that time through March, however, backlog readings have quickly expanded, resulting in this month’s all-time high backlog reading. Much of this volatility is attributed to crippled supply chains and strong demand. The current supplier delivery reading in excess of 78 is roughly 13 points higher than the pre-COVID-19 peak reading of nearly 65. However, this 13-point spread represents as much as a 90% increase in the number of survey respondents who reported worsening supply chain conditions as compared to the prior peak.
Seasonal shipping rush sends supplier delivery reading higher, marking the first time since mid-2019 that the Index reported two consecutive months of expanding business activity.
For February 2020, the Composites Index contracted slightly with a reading of 49.7.
The Composites Index moved higher in November with a reading of 49.4.