Recovery slow, but steady, for US plastics industry

Comments Email Print Reprints

WASHINGTON (Dec. 15, 3:55 p.m. ET) — The U.S. plastics industry is continuing its slow recovery from the recession of 2008-09 — and industry officials are optimistic about the future.

“The plastics industry is faring better than other manufacturing sectors in the U.S.” Society of the Plastics Industry Inc. President Bill Carteaux said during a Dec. 15 press webinar. “Export growth continues to be a bright spot.”

Low-priced natural gas and the lower value of the U.S. dollar are helping the U.S. to remain competitive in the global plastics market, added Michael Taylor, SPI’s senior director of international trade.

During the webinar, Carteaux and Taylor highlighted data to show where the industry stands, based on 2010 results. Findings included:

• Shipments of $341.4 billion, employing 876,000 at almost 17,000 facilities.

• Value of shipments was essentially flat vs. 2005.

• Number of employees fell almost 24 percent vs. 2005.

• New capital expenditures fell almost 9 percent vs. 2005.

The above three items do not include wholesale trade data. The number of plastics jobs and facilities has declined as a result of the recession and of industry consolidation and increased productivity, Carteaux and Taylor explained.

California led the country in number of plastics jobs (with 75,800), followed by Ohio, Texas, Michigan and Illinois.

Based on concentration of jobs, Indiana ranked first with 15.2 plastics jobs per 1,000 non-farm employees. Next up were Michigan, Ohio, Wisconsin, Kentucky and South Carolina. The U.S. average was 6.8.

In the state concentration rankings, Connecticut made a leap from 24th to 15th because of gains in wholesale trade jobs, officials said. Alabama went from 20th to 16th because of gains in manufacturing, while Pennsylvania climbed from 15th to 11th because of what officials described as “recession-resistant businesses.”

Going back to 1980, officials said U.S. plastics employment was essentially flat based on per-year growth. The industry’s value of real shipments and productivity growth each increased by more than two percent annually over that 30-year period.

U.S. plastics exports increased more than 24 percent between 2009 and 2010, with imports increasing 23 percent. Plastics exports accounted for almost five percent of all U.S. exports in 2010.

The industry posted a trade surplus of $16.2 billion in 2010 – up almost 28 percent vs. 2009. But – as has been the case in recent years – all of the industry’s surplus came from the resin sector. Plastic products, molds and machinery each posted deficits in 2010, as they have every year since 2002.

Although the trade deficit in plastics products remains sizable, Carteaux said that the deficit in machinery and molds “has leveled off and is not worsening.”

The U.S. plastics industry’s top five export destinations in 2010 were Mexico, Canada, China, Belgium and Japan. Exports to Japan and South Korea each grew more than 40 percent vs. 2009, while exports to Taiwan, Brazil and Belgium each surged more than 30 percent.

The country’s top five import sources for plastics trade were Canada, China, Mexico, Germany and Japan.

In the first 10 months of 2011, exports were up almost 11 percent, with imports increasing almost 10 percent. The industry’s trade surplus was on pace to be slightly higher in 2011.

Carteaux and Taylor also praised recent new U.S. free trade agreements with South Korea, Colombia and Panama. Those agreements should make U.S. plastics exports “even brighter,” Taylor said.

Washington-based SPI hosted the webinar to introduce new versions of its Size and Impact of the U.S. Plastics Industry and Global Business Trends studies.