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After a pause, recovery continues.

While the U.S. economy as a whole was supposedly expanding at a furious clip in the fourth quarter of 1992, the very gradual recovery in custom processing capacity utilization rates stalled out, though it seems to have been only a temporary pause in the upward trend. According to survey returns from 378 custom processors, average capacity utilization dropped 2 percentage points in the fourth quarter. Custom injection and extrusion each lost one point, while the decline in operating rates was more precipitous for custom thermoforming and compression/transfer molding. Only custom blow molding held even.

New tooling orders, however, continued to increase over the level of the previous quarter. The rate of increase was the same as in the quarter before in terms of unit orders, but lower in dollar volume.

What's more, respondents' comments on business conditions revealed a higher "optimism/pessimism ratio" than in any quarterly survey since 1988. An admittedly unscientific evaluation of respondents' comments shows more than two-thirds of them considered business conditions to be either good or at least improving at the start of the new year. Only 26% commented negatively or pessimistically.

WESTERN DOLDRUMS PERSIST

As in our third-quarter '92 survey, custom processors in the West reported the lowest average operating rates. Looking at just custom injection molders, both the West and South Central region ranked lowest, though operating rates in the West had actually improved slightly from the quarter before. The Northeast had the highest operating rates for all custom processes, and the North Central industrial heartland was busiest for injection molders, but both regions lost some ground from the quarter before.

Tooling orders were up substantially for all regions except the West and North Central, which experienced little or no change.
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Title Annotation:Manufacturing Activity Index; plastics industry
Publication:Plastics Technology
Date:Apr 1, 1993
Words:290
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