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 Public Policy, Materials, 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

Some medical devices could get faster approval with new FDA rules

April 22, 2014 7:41 pm ET

The U.S. Food and Drug Administration is proposing an expedited approval for medical devices for devices aimed at the diagnosis or treatment of...    More

Image

Two Ohio groups team up to accelerate development of future medical devices

April 22, 2014 9:55 am ET

The Austen BioInnovation Institute in Akron and Cleveland-based design specialists Nottingham Spirk announced a strategic partnership that the two...    More

Image

HRS adding more North American production for hot runners

April 22, 2014 12:57 pm ET

An Italian tooling component supplier is set to open a new production plant in Grand Rapids, Mich. The HRS Flow Division of San Polo di Piace-...    More

Two Eastman buildings among 10 biggest energy savers in national contest

April 22, 2014 11:35 am ET

Two offices at the headquarters of Eastman Chemical Co. in Kingsport, Tenn., ranked in the Top 10 for energy efficiency in the latest Energy Star...    More

Image

Material Insights: Shell Chemical meets with residents

April 21, 2014 2:16 pm ET

Power outage at a PE plant and the return of a PVC feedstock plant after a fire on this week's Material Insights.    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Automotive Market Review and Outlook 2014 The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

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

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events