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The Gardner Business Intelligence (GBI) Composites Business Index (CBI) rose to 56.4 in August, lifting the year-to-date average reading to 54.6. During the year-to-date, the Index has indicated sustained growth compared to the same period in 2016, when the Index reported industry contraction. Expanding Production, New Orders and Employment subindices raised the August Index reading; however, contracting Supplier Deliveries, Exports and Backlogs combined to prevent an even better showing.  

New Orders and Production

The data for Production and New Orders often move in a closely coordinated manner because changes in new order volumes are often closely followed by similar changes in production output. In the year-to-date period, both measures have reported strong rates of growth. Production, in particular, has been very strong during 2017, besting the Index average for any other eight-month period in at least the past five years. Data on New Orders in 2017 have also been very strong, yet have lacked record-breaking readings for the year.

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As would be expected when New Orders and Production move closely together, changes in the Backlogs subindex during 2017 have been relatively muted. Backlogs have averaged 50.6, indicating only very mild growth in Backlogs. The GBI team closely monitors the Backlog subindex, because it is considered a bellwether of both manufacturing capacity utilization and machine tool sales.  

Exports

In 2017 through August, the Exports component of the CBI has averaged 49.4, representing only very mild contraction. By comparison, Exports from the US began a long period of contraction in 2014 that did not end until the fourth quarter of 2016.

Employment

In recent months, Gardner Business Intelligence has closely monitored the employment situation in the manufacturing industry. The Employment component of the GBI: Composites Business Index, through August, showed a marked change from mild contraction in 2016 to strong growth in 2017. Over the previous 12-month period the Employment subindex has exceeded a reading of 50, indicating employment growth in the composites industry. In 2017, through the end of August, the Employment reading has averaged 55.8. In the context of the past five years of employment figures, the growth in employment in 2017 is unprecedented.

Prices

Since December 2016, a growing spread between the growth curves in Material Prices and Prices Received grew wider: In first quarter of 2017, growth in Materials Prices increased at its fastest rate in more than five years while Prices Received increased much more modestly. In the second and third quarters of 2017, Material Prices growth has moderated, yet as August closed out, still outpaced the growth in Prices Received. Gardner Business Intelligence tracks changes in Material Prices and Prices Received data to measure changes in the overall profitability of the US composites industry.