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US plastics industry shows gains, but uncertainty clouds 2013 outlook

By: Frank Esposito

December 13, 2012

WASHINGTON (Dec. 13, 5:10 p.m. ET) — The U.S. plastics industry broke a long losing streak in 2011, increasing its jobs total for the first time since 1999. Some of that good fortune continued into 2012, as exports of molds and machinery each posted solid gains in the first nine months of the year.

In 2012, the U.S. industry employed 885,000 — an increase of 9,000, or 1 percent vs. 2010. Officials with the Society of the Plastics Industry Inc. said they had no exact data regarding the jobs gain. During a Dec. 13 press webinar, SPI officials also unveiled data that showed the value of plastic-related shipments grew 11 percent to more than $380 billion during 2011.

The first nine-months of 2012 brought a gain of almost 18 percent in the value of exported molds, and a rise of almost 8 percent in the value of exported machinery.

“The data shows that the plastics industry as a whole is resilient and has fared better than other manufacturing sectors,” SPI President Bill Carteaux said.

Some challenges remain, however, mostly in the form of uncertainty felt as President Obama and Congress struggle with the “fiscal cliff,” which could eliminate tax breaks and institute automatic spending cuts.

“Our members want a long-term budget deal and for our elected officials to handle the deficit and the national debt,” Carteaux said. “The fiscal cliff has massive implications for our industry. The U.S. plastics industry can’t afford the status quo. We need to re-ignite the growth we saw in the first half of 2012.”

In spite of the growth in molds and machinery, overall U.S. plastics exports basically were flat this year. Through September, exports have grown only 0.2 percent. “Exports are slowing because of uncertainty,” Carteaux added.

The 2011 shipment value total was more than 26 percent higher than the 2005 level. The total number of plastics jobs, while up from 2010, was almost 20 percent under 2005, when the sector employed more than 1.1 million.

In other data, the ranking of U.S. states with the most plastics jobs remained unchanged in 2011. California led the way with almost 75,000 jobs, followed by Ohio, Texas, Michigan and Illinois. In job concentration, Indiana again topped the U.S, with 15.4 plastics jobs per 1,000 non-farm workers, followed by Michigan, Ohio, Wisconsin and South Carolina.

Concentration of plastics jobs has been increasing by a sizable amount in Nebraska, Alabama, Connecticut and Vermont, while that same ratio has been declining in Mississippi, New Hampshire, Kansas and Missouri, according to SPI senior international trade director Michael Taylor.

SPI also tracked the United States’ fastest-growing plastics export partners between 2010 and 2011. The top five on that list were Venezuela, Singapore, Nigeria, Russia and Vietnam, each of which were up at least 25 percent. Going back to 2000, the biggest gainers in that category are Algeria, Vietnam, India, Nigeria and Russia, each of which were up at least 700 percent.

In 2011, the top 5 export destinations for American plastic shipments were Mexico, Canada, China, Belgium and Brazil. Those five accounted for 62 percent of exports. Exports increased in 2011 to each of those countries with the exception of Belgium. Brazil’s appearance was the first in the top 5, where it replaced Japan. Recent free trade agreements between the U.S. and South Korea, Colombia and Panama — as well as improved trade relations with Russia — should allow export growth to remain healthy, Taylor said.

The top 5 import sources for plastic shipments into America in 2011 were Canada, China, Mexico, Germany and Japan. Those five accounted for 74 percent of the import total. Plastic imports into the U.S. overall were down slightly in 2011.

The U.S. plastics market posted a surplus again in 2011, but as has been the case in prior years, all of that surplus came from resin sales. The U.S. industry again ran deficits in plastic products, molds and machinery.