High-Performance Composites

NOV 2014

High-Performance Composites is read by qualified composites industry professionals in the fields of continuous carbon fiber and other high-performance composites as well as the associated end-markets of aerospace, military, and automotive.

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Page 14 of 67

N O V E M B E R 2 0 1 4 | 1 3 BY THE NUMBERS BY THE NUMBERS Steve Kline is the director of market intelligence for Gard- ner Business Media Inc. (Cincinnati, Ohio), the parent company and publisher of H i g h - P e r f o r m a n c e Composites. Kline holds a BS in civil e n g i n e e r i n g f ro m Vanderbilt University and an MBA from the University of Cincinnati. I COMPOSITES BUSINESS INDEX 50.2 – INDUSTRY FLAT SINCE JULY n August, our Composites Business In- dex (CBI) read 49.9, indicating the in- dustry was essentially fat after 10 con- secutive months of growth. Nonetheless, the Index was higher than it was one year earlier. In fact, the month-over-month rate of change had grown since Septem- ber 2013, and the annual rate of change had accelerated for seven months. Also, there were some positives in the subindices. New orders increased for the ninth month in a row, and production expanded for the eighth straight month. Although backlogs contracted for a third month, the rate was slower and its in- dex was 17.4 percent higher than one year earlier and had shown accelerated growth every month in 2014 — a very strong sign that capacity utilization and capital equipment investment will grow through 2015. Employment grew, but at its slowest rate since June 2013. Exports had contracted sharply for two months, falling to their lowest level since the in- dex began (December 2011). Supplier deliveries had lengthened at a moder- ately increasing rate since October 2013. Material prices continued to increase, near peak levels reached since January 2012. Prices received were up for the ffth straight month — the longest stretch of increases since summer 2012. Future business expectations were at their low- est level since September 2013. Mid-size facilities (20 to 249 employ- ees) continued to expand. Those with less than 19 employees had contracted four of the previous six months. Facilities with more than 250 employees contract- ed for the frst time since October 2013. Regionally the West and Northeast, expanded. The North Central – West con- tracted after expanding in July. Both the North Central – East and the Southeast had contracted for two straight months. Future capital spending plans con- tracted for a second month. The annual rate of growth slid to its second slowest rate since November 2013. September's CBI of 50.2 indicated a slight overall expansion, but the industry remained fat for a fourth month. The rate of change was a mere 2.4 percent, the slowest month-over-month growth since August 2013. For the frst time in 2014, the annual rate of growth decelerated. New orders grew for the tenth consecu- tive month, at a rate virtually unchanged for three months. Production expanded for a ninth month. The rate of expansion, had slowed since June, but ticked up slightly. Backlogs contracted for a fourth month, but its index was 2.5 percent higher than one year earlier. Signifcant growth in the annual rate of change was another strong sign that capacity utiliza- tion and capital equipment investment will increase through 2015. Employment growth accelerated noticeably compared to the previous two months. For a second month, exports contracted at their fast- est rate in CBI history. Supplier deliveries lengthened again, and had done so at an accelerating rate since June. Material prices continued to increase, but growth had slowed since May and Sep- tember saw the slowest rate of 2014. Pric- es received had increased for six straight months — their longest sustained stretch since summer 2012. Prices received were at their highest since June 2012. After fall- ing signifcantly for two months, future business expectations rebounded sharply. Larger facilities continued to see ex- ceptional growth at an accelerating rate. Mid-size plants contracted for the frst time since December 2013, and the rate was the fastest since December 2012. Plants with less than 20 employees con- tracted for the third month in a row. For a second month, only two regions expanded. The West was the best per- former again. The only other region to grow was the Southeast, for the frst time since May. Contraction was relatively moderate in the Northeast, and North Central – East accelerated as it had dur- ing the two preceding months. Future capital spending plans con- tracted for a third month, but the rate had slowed each month. Although the annual rate of change went up, it did so at its slowest rate in the past year. THE COMPOSITES BUSINESS INDEX Subindices September August Change Direction Rate Trend New Orders 52.5 52.3 0.2 Growing Faster 10 Production 53.3 53.0 0.3 Growing Faster 9 Backlog 44.6 46.6 -2.0 Contracting Faster 4 Employment 53.3 50.8 2.5 Growing Faster 19 Exports 41.8 42.5 -0.7 Contracting Faster 3 Supplier Deliveries 55.6 54.5 1.1 Lengthening More 34 Material Prices 64.3 65.8 -1.5 Increasing Less 34 Prices Received 55.0 51.1 3.9 Increasing More 6 Future Business Expectations 73.1 66.7 6.4 Improving More 34 Composites Business Index 50.2 49.9 0.3 Growing From Contracting 1

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