Gardner Business Index at 51.5 in December
New orders expand as most US manufacturers experience year-end growth.
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With a reading of 51.5, the Gardner Business Index for December 2016 showed that the US composites industry grew for the first time since September 2016. The December Index was the second highest recorded since March 2015. In the second half of 2016, the Index performed its best since the first half of 2015. Given other economic trends, this appears to be a positive sign for the US composites industry in 2017.
New orders expanded in December for the first time since September 2016. Production increased for the fifth month in a row. Despite somewhat stronger growth in production recently, the backlog subindex continued to contract, but did so at a notably slower rate in December. In fact, the backlog subindex reached its highest level since February 2016. This trend in the backlog subindex indicated that capacity utilization at composites fabricators's production facilities should increase during 2017. Employment increased for the fifth consecutive month and at its fastest rate since March 2015. The export subindex grew for the first time since June 2014, shooting up to its highest level since the GBI survey was first recorded in December 2011. Supplier deliveries shortened in December for the second time in three months as that subindex hovered around 50 for the third month in a row.
Since April 2016, material prices had increased as December closed out at a consistently strong rate — the subindex remained just below 60 for most of that period. Prices received increased for a second consecutive month. The subindex, in December, had trended up since January 2016. After a sharp spike during November in the wake of US elections, the future business expectations subindex increased again in December, reaching a record high.
Among the markets served by the US composites industry, the aerospace sector grew once again in December 2016, after two months of contraction indicated in its subindex. This was the second highest level for the aerospace subindex since April 2016. Although the aerospace subindex improved, the automotive index remained stuck at its lowest level since January 2016 for a second straight month. As December closed out, the ship/boatbuilding subindex had shown significant growth for three straight months. Other manufacturing, which includes miscellaneous consumer goods, had contracted in December, for the eighth time in the previous nine months.
Regionally, the North Central-East was the fastest growing in the US in December for the second time in three months. It was the fourth straight month of growth for this region. The West was the only other region in the US to grow as 2016 closed out.
US-based composites manufacturing facilities with more than 250 employees grew for the second month in a row in December, while plants with 100-249 employees tallied strong growth for a fifth month. Companies with 50-99 employees expanded for the third time in four months. After two months of moderate contraction, companies with 20-49 employees were expanding again. But companies with fewer than 20 employees contracted in December for the fourth month in a row.
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