Composites Index marks first COVID-era expansion

Composites Fabricating Business Index: September’s reading of 53.0 (51.6 when excluding the influence of supplier deliveries) marks the first time since January that the industry has reported an expansion in business activity.

The Composites Index registered 53.0 in September, marking an overall expansion in composites industry activity for the first time since the start of the COVID-19 pandemic. The Index was led higher by a combination of expanding activity in new orders, production and employment. The readings for new orders and production activity made significant moves in September with increases of 8 and 10 points, respectively.

Can production activity continue to expand while supplier deliveries slow? Production activity expanded for a second month; however, supplier delivery readings remain stubbornly high, indicating that supply chains are still greatly disrupted. This combination raises the question of how long this situation can persist.

The supplier deliveries reading increased during the month, representing a slowing of deliveries activity. In the year-to-date period, supplier deliveries activity in the composites industry has been slower to return towards historical norms than for most other manufacturing disciplines tracked by Gardner Intelligence. The ongoing constraint in supplier deliveries puts into doubt the ability of fabricators to sustain the nascent expansion in production activity. Without further improvement in the supply chain, production may falter, causing headwinds for new orders and lengthening backlogs. Removing the inflationary influence of supplier deliveries from the September composites index result would have resulted in a lesser, but still expansionary, reading of 51.6.

Among the many end-markets served by the composites industry, electronics and custom processors have reported relatively better activity levels in recent months. These improvements have been offset by the well-publicized challenges facing the aerospace industry.

The Composites Index is unique in its ability to measure monthly business conditions specific to the composites industry. The challenges facing fabricators today require business leaders to have good data for making effective forward-looking decisions. It is thus particularly important at this time for our readers to complete the Index survey sent to them by e-mail each month. Your participation will enable the best and most accurate reporting of the true impact that COVID-19 is having on the composites fabricating industry and help the industry prepare for its eventual rebound.