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The March GBI: Composites Index moved lower as a significant slowing of new orders activity combined with an increase in production activity resulted in the sharpest contraction in backlogs since June 2016. The latest reading of 52.6 is 13.0 percent lower compared to the same month one year ago when the Composites Index was only one month away from reaching its all-time high in April 2018. Gardner Intelligence’s review of the underlying data indicates that the Index was sustained by production, supplier deliveries, employment and new orders. The Index – calculated as an average — was pulled lower by exports and backlogs, both of which contracted during the month.

February’s surprise expansion in new orders activity did not carry into March, as the latest reading for new orders fell nearly five points. Between January and March, the new orders reading experienced a net 2.5-point increase. Exports registered a fourth month of either contracting or flat activity, which further weakened order activity. The recent activity in new orders and exports combined with a small increase in production activity resulted in backlogs contracting at the steepest rate in more than two years.