Composites Index improves on employment, new orders

Expanding employment, new orders, backlogs. November’s Index data reported expanding activity in employment, new orders and backlogs. An all-time low supplier delivery reading prevented the Index from otherwise rising above 50.

Registering 49.4 for November, the Composites Index moved higher for a second month, moving closing toward a reading of 50. Index readings above 50 indicate expanding activity, while values below 50 indicate contracting activity. The further away a reading is from 50, the greater the change in activity. Gardner Intelligence’s review of the data found that employment led the improvement in the Index, followed by new orders and backlogs. Conversely, contractionary readings for production, exports and supplier deliveries pulled the Index — which is calculated as an average of its components — lower.

November saw the continuation of a trend in total new orders and exports that was previously reported in October’s reading. Expanding total new orders coupled with contracting exports implies increasing domestic orders activity. Bolstering this inference was November’s expansionary backlog reading, the first above-50 reading since June.

Backlogs increase on implied growth in domestic orders. November’s GBI data implies that the industry has been experiencing growing domestic demand. This inference was bolstered by the Index’s first expansionary backlog reading since June.

Supplier deliveries data continues to complicate the picture of the industry’s health. November’s supplier delivery reading marked an all-time low despite positive new order and backlog readings. The supplier delivery reading could be a reactionary response to the period between July and September during which new orders temporarily but steeply contracted while production expanded. If this is the case, then supplier delivery activity can be expected to improve.

More information about the Composites Fabricating Index can be found at http://www.gardnerintelligence.com/.