CW Business Index at 52.5 – US growth accelerates for a second month

Gardner Business Media's director of market intelligence Steve Kline, Jr., presents the CW Business Index for December 2014.


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With a reading of 52.5, the CompositesWorld Business Index for December 2014 showed that the US composites industry had expanded at a noticeably faster rate than in November. From July to October, during the past year, the industry had been virtually flat. But, in the last two months of 2014, it began to expand at a more rapid rate. Although the Index posted increases in November and December, the month-over-month rate of change remained relatively stable at about 3.0%. The annual rate of growth, however, decelerated in December and the three preceding months.

New orders grew for the 13th consecutive month in December. The rate of increase in new orders had been fairly constant during the previous six months. Production had expanded for 12 months. However, the production subindex grew at its slowest rate of the year in December. Backlogs expanded for the first time since May 2014. Annually, the rate of growth in the backlog index slowed for the fourth straight month. The trend in the annual rate of change, again, was a good indication that capacity utilization and capital equipment investment will increase into the second quarter of 2015. Employment continued to grow in December, increasing at its fastest rate since June 2014. Exports continued to contract, but the rate of contraction had slowed during each of the previous three months. Supplier deliveries continued to lengthen, increasing at their fastest rate since March 2014.

The rate of increase in material prices had slowed dramatically in recent months. As a result, the December material prices subindex was at its lowest level since September 2012. Prices received increased for the first time since September 2014. Prices received had been increasing, generally, since April 2014. Future business expectations increased sharply in December, for the second month in a row, and they reached their highest level since February 2014.

Composites manufacturing facilities with more than 100 employees expanded at a much faster rate in December than they had in November. Plants with 50-99 employees continued the consistent, solid growth they had experienced since June 2014. Facilities with 20-49 employees, however, contracted for the fourth month in a row, although the rate of contraction in December was the slowest of the four. Fabricators with fewer than 20 employees also continued to contract.

The North Central – West was easily the fastest growing US region in December. It had expanded during two of the previous three months. That area was followed by the West and the North Central – East regions. The South Central, Northeast, and Southeast sectors, however, all contracted at a moderate rate.

Future capital spending plans contracted 25.7% compared to December 2013. Compared to the same period in 2013, they contracted in five of the previous six months, and the annual rate of change contracted for the first time since the Index began.