Gardner Intelligence Blog

According to PlasticsEurope’s research, the European plastics production market will decrease in 2019 for a second consecutive year. As Europe’s plastics industry dims further in the 2019/2020 period, more of the world’s processors will compete where opportunities abound. This will elevate plastics competition in the U.S.

“Plastics manufacturers are suffering from weak economic development not only in Europe, but also worldwide,” according to PlasticsEurope Regional Director Dr. Rüdiger Baunermann. “Economic development has lost considerable momentum, and important customer industries are showing weak to clearly negative growth rates.” While the contraction in Europe is ongoing, it contrasts considerably with Gardner Intelligence’s data on the U.S. plastics industry.

Housing Permits Grow at Faster Rate since March 2017

There were 114,300 housing permits filed in September 2019. The month-over-month change in permits was 15.0%, growing at an accelerating rate for the third-straight month. September’s rate of month-over-month growth was the fastest since March 2017.

In September, the annual rate of change grew 0.6%, ending four-straight months of contraction. The annual rate of growth will continue to accelerate in the months ahead as the three-month rate of change was 9.6% in September.

The Plastics Industry Association (PLASTICS) presented the results from its 2019 Global Trends Report at the K-Show in Dusseldorf, Germany on October 17th.  PLASTICS Chief Economist Perc Pineda, along with the PLASTICS CEO Tony Radoszewski, discussed the challenges and opportunities facing the industry in the coming years. 

According to the Association, in the 12-month period ending second quarter 2019:

Durable Goods Production Contracts for First Time since 2016

In September, the index for production of durable goods was 109.2, which was down 0.4% from one year ago. This ended a streak of 33 consecutive months of growth in the durable goods production index. The annual rate of change, which is easier to correlate with other data points, grew 1.9% this month. However, the annual rate of growth decelerated for the seventh-straight month. September’s growth rate was the slowest since September 2017, and it is likely to decelerate even more, as the month-over-month rate of growth has been relatively weak the last six months. Further, the key leading indicator of production – durable goods new orders – is indicating slower growth in industrial production.

We track industrial production and its leading indicators for a number of industries.

Capacity Utilization Contraction Accelerates for Third Month

In September, durable goods capacity utilization was 75.4%, which was the slowest rate of durable goods capacity utilization since April. Compared with one year ago, capacity utilization contracted 1.9%. This was the third month in a row of accelerating contraction and the fastest rate of month-over-month contraction in three years.

Annual growth in capacity utilization of durable goods decelerated to 0.8% from 1.3% in September. That is down from its peak of 2.8% in January, and its slowest rate of growth since November 2017. As the annual rate of growth tends to lead capital equipment consumption by seven-to-10 months. Capacity utilization is signaling machine tool orders will contract for the remained of 2019 and into 2020.


Top Shops

‘Top Shops’ is a benchmarking and recognition program designed to help shops build their business.

World Machine Tool Survey

An independent annual survey that collects statistics from machine tool consuming and producing countries and compares them in real U.S. dollars.

Capital Spending Survey

An annual survey that collects statistics regarding budgeted spending on machine tools, testing equipment, software and more.

Gardner Business Index

A diffusion index measuring month-to-month changes in activity at durable goods and discrete parts manufacturing facilities.