Composites index moderates lower after all-time high
Composite fabricators report slowing expansion in new orders, production, with gains made in supplier delivery and employment activity readings.
The Composites Index moderated in April as declining readings for new orders, production and backlog activity more than offset gains in supplier delivery and employment activity. Falling readings which remain above 50 signal a slowing expansion for that activity.
The Composites Index fell from its March reading, ending April at 62.0. Among the six components which constitute the Index, the supplier delivery reading moved above a reading of 80 for the first time, securing a third consecutive month of expanding activity. Further, this component reading now stands 16 points above its 2018 all-time high. Rising supplier delivery readings reflect the growing issue of slowing order-to-delivery times among upstream suppliers and the obvious consequences it has for downstream production. Aside from supplier delivery and employment activity — the latter of which also reported a higher reading — new orders, production and backlog all registered slowing growth. Moreover, April’s export activity reading fell further below 50, signaling a quickening contraction in export levels.
Near all-time high production and employment activity readings suggest fabricators are doing all they can to keep up with demand. Despite their best efforts, however, backlog activity has continued an unabated ascent to near record levels.
Despite production activity registering an all-time high in March and a near high in April, total new orders activity continues to outpace production, which has propelled backlog activity to all-time highs. This is happening in spite of April’s slowing backlog growth. In response to demand for products, the industry has reported rising employment with April’s reading for the third consecutive year.
Registering at 42.3 in May, the Composites Index signals decelerating contraction and improved component readings.
Quickening expansion in new orders and production activity was counterbalanced by worsening contraction in export activity for the January Composites Index.
Production may struggle under slowing new orders and supply chain challenges.