Composites activity returned with accelerated contraction in September
The GBI: Composites contracted faster again in September, closing down 1.6 points to 45.9, the lowest the index has been in more than 2 years.
Accelerated contraction. GBI: Composites Fabricating in September is down 1.6 points relative to August’s reading. Photo Credit, all images: Gardner Intelligence
The small bounce back seen in the GBI: Composites Fabricating in August appears to have been a blip, with the index contracting faster again in September, marking 6 months straight of contraction. The index was down 1.6 points for a 45.9 reading, the lowest the index has been in more than 2 years.
Five of six components contracted, including employment for just the second month this year, likely in part due to the reflection of interest rate pressure on costs. Exports, which generally hang steady over time, contracted at a faster rate in September, landing at a 6-month low.
New orders, production and backlog also contracted faster again in September. The consistent trend of these three components is cause for conservative expectations concerning industry upswing, at least near term.
Supplier deliveries, the outlier component, has lengthened/expanded at about the same rate for 3 months straight.
Future business, a sentiment/outlook metric that is not part of the GBI calculation, remained in expansion territory (i.e., most respondents believe the industry is looking up), but dropped a little in September.
Cost pressures. Employment and exports registered atypical trends in September. (This graph reports on a three-month moving average.)
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