SPI says US plastics industry is on track to recover from recession this year

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: April 1, 2012 6:00 am ET

Related to this story

Topics Materials, Public Policy, Molds/Tooling

ORLANDO, FLA. (April 1, 3:40 p.m. ET) — The U.S. plastics industry has an “extremely good chance” to recover to production levels from before the global recession by the end of this year, barring a Eurozone meltdown or other unforeseen economic shocks, a senior official with the Society of the Plastics Industry Inc. predicted in an April 1 speech at NPE2012.

“If the trends continue in the same direction, and nothing of a large negative scale like a Eurozone meltdown or something unforeseen like what happened in Japan does not occur, I think we have an extremely good chance by the end of the calendar year of returning to pre-recession levels,” said Michael Taylor, SPI’s senior director of international trade.

Washington-based SPI is one of the largest U.S. trade associations for plastics and sponsors the NPE show. Taylor made his comments in a speech at a forum on exporting sponsored by the U.S. Department of Commerce, and in an interview afterward.

While overall plastics industry GDP is expected to recover this year, Taylor offered some sizable caveats, such as that neither jobs nor the number of facilities are expected to regain pre-recession levels by that time.

The U.S. plastics industry employed just under 900,000 people in 2010, the last year figures are available, compared with about 1.1 million in 2005, according to SPI.

“Obviously facilities are not going to be back to where they were and on the employment side we’ve done tremendous things there but it may still lag somewhat, but it is recovering,” he said.

In comments at the April 1 forum on exporting, sponsored by U.S. Department of Commerce, Taylor said the overall manufacturing sector is recovering faster than the American economy.

Manufacturers as a whole in the United States have added more than 400,000 jobs in the last two years, the first time since the 1990s that the sector has added employees, Taylor said.

U.S. manufacturing should outperform overall GDP through 2013, with growth of 3.5 percent to 4 percent a year, compared with growth just over 2 percent for the U.S. economy generally, Taylor said.

The U.S. plastics industry’s recovery is not uniform, however. The resin sector is faring best while the mold making sector is “problematic,” Taylor said.

The other two of the industry’s four core sectors – machinery and plastics product manufacturing – are faring reasonably well, he said.

“I think resin stands out among the four core as recovering the best, because of some other advantages, like the value of the dollar” and the price of natural gas in the United States, Taylor said. “All three core segments are doing pretty well. Molds are problematic.”

As of mid-2011, production levels in the plastics product sector were also lagging, achieving about 85 percent of its levels in 2007, SPI said. That’s better than it was in the worst of the recession, when production levels were 75 percent of 2007 figures, but at least by mid-2011, that sector’s recovery was still in progress, SPI figures showed.

Some mold making companies express concerns about SPI’s support of free trade agreements, including new pacts with South Korea and Columbia, Taylor said.

“I know when we talk about free trade advocacy, we do hear some negative comments about supporting free trade agreements from the mold side,” he said. “The mold segment is the one I want to understand better. What is the more complicated answer as to why mold making, among the four segments, is having a harder time? It doesn’t jump right out at you.”

He said the mold making sector showed signs of closing its trade gap at the end of 2011, and he noted that SPI is interested in following up any complaints of unfair trade practices.


Comments

SPI says US plastics industry is on track to recover from recession this year

By Steve Toloken
Staff Reporter / Asia Bureau Chief

Published: April 1, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

2014 leaves some resin firms in the black while others struggle

January 23, 2015 2:37 pm ET

On the financial side, 2014 was good for Hexcel Corp., so-so for Celanese Corp. and it could have been better for Omnova Solutions.    More

Image

Clariant's ColorForward predicts future consumer trends

January 23, 2015 1:33 pm ET

Clariant International Ltd. is marking a decade of color forecasting with the 10th edition of its ColorForward program.    More

Image

The future for PolyOne is colorful

January 23, 2015 1:28 pm ET

PolyOne Corp. is writing four color stories for 2016.    More

Plastics executive pleads guilty in federal firearm case

January 23, 2015 12:37 pm ET

Richard Cummings, 43, a former manager at Tri Town Precision Plastics Inc. in Deep River, Conn., has pleaded guilty to violating federal firearms...    More

Image

Mexico's Polymer Solutions looks to grow, expand offerings with name change

January 23, 2015 12:03 pm ET

British biodegradable additives developer Symphony Environmental Technologies plc's Mexico distributor has changed its name from Plásticos Degradables...    More

Market Reports

Plastics in Automotive: Innovation & Emerging Trends

This special report newly released by PN and sponsored by The Conair Group examines current trends in the use of plastics in automotive, materials innovations and the changing landscape. It includes a review of legislative/regulatory activity impacting vehicle development and lightweighting, market opportunities & challenges for mold and toolmakers, innovative design strategies being implemented by major OEMs and suppliers, as well as a review of key indicators in Canada, Mexico, Brazil and China.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

Learn more

Upcoming Plastics News Events

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events