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

Non-recyclable items gumming up the works at recycling centers

August 21, 2014 3:46 pm ET

The influx of all sorts of unacceptable items at recycling centers has gotten to the point that Charlotte, N.C.-based ReCommunity is trying to bring...    More

Image

Investment firm specializes in emerging polymer firms in Ohio

August 21, 2014 3:20 pm ET

A plastics market veteran is working with an investment firm and a research foundation to help commercialize polymer technology in the Buckeye State.    More

Image

Bayer, SCAC partner on water reuse project

August 21, 2014 12:48 pm ET

Bayer MaterialScience (BMS) and Shanghai Chlor-Alkali Chemical Co. Ltd. (SCAC) have entered into a preliminary agreement for the reuse of waste water ...    More

Image

Automakers look under the hood for the next lightweighting opportunities

August 20, 2014 1:06 pm ET

The automotive industry's current favorite target for lightweighting efforts is the powertrain, according to a recent survey.    More

Image

Small country introducing plastic coins

August 20, 2014 10:48 am ET

You've heard of countries adopting plastic currency, to replace paper money. How about plastic coins, to replace metal? It's hard to believe but true....    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

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

More Events