Composites Index sustains a third month in record territory

The Composites Index rose slightly in May to 62.6, marking the third consecutive month in which the Index has bested its pre-pandemic high in 2018. The index was propelled higher by rising supplier delivery, new orders and backlog readings. A slowing contraction in export orders, in addition to slowing expansion in employment and production, kept the index from making further gains. Generally, expansion across the industry has been uneven in the year-to-date period due to the industry’s large exposure to the aerospace market, which remains fragile. In contrast, fabricators have found relatively greater success serving the automotive and custom processing markets.

Overall, May’s data reported a fourth consecutive month in which new orders activity significantly outperformed production. Historically, new orders and production readings have kept a very tight relationship with production frequently posting a slightly higher reading. This supply and demand imbalance, seen in successive months, has significantly affected the industry in two critical ways. The first has been quickly rising backlog levels to new all-time highs, and the second has been rising material prices which affected virtually all surveyed fabricators in May.