For any economist, the easiest path to popularity is to predict better days ahead. So Kris Bledowski's social calendar must be packed right now.
Bledowski an economist with the Manufacturers Alliance/ MAPI policy research group in Arlington, Va. offered some rays of hope at the 2010 Plastics News Executive Forum, held March 7-10 in Tampa.
Though U.S. plastics product manufacturing fell 14 percent in 2009, according to government data, Bledowski predicts it should reach 3 percent growth in 2010 and 6 percent growth in 2011.
That will be part of an overall U.S. economic recovery that will see GDP growth of 2.8 percent in 2010 after falling by that amount in 2009 and further growth of 3 percent in 2011, according to a MAPI forecast.
A severe downturn often sows the seeds of great expansion, Bledowski said. Then when demand picks up, you have a double boost.
The plastics production recovery will be greater than that of manufacturing overall, which should bounce back 5-6 percent in 2010, he added. The plastics comeback also should help capacity utilization rates for plastics manufacturing, which were 83 percent in late 2007, but had fallen to 72 percent by early 2010.
Overall U.S. manufacturing capacity use now stands at 65 percent, its lowest level in 70 years.
U.S. machinery makers also have something to look forward to in 2010, as Bledowski expects industrial machine production which had plummeted 33 percent in 2009 to climb 10 percent this year and 20 percent in 2011.
Plastic resin makers also should see a 7 percent production hike this year after a 2 percent drop in 2009. Growth in that market then will dip to 3 percent in 2011, Bledowski said.
Bledowksi also shared some general U.S. economic predictions made by MAPI, including:
* The U.S. unemployment rate rising to 10 percent this year before falling to 9.4 percent in 2011 almost matching the 9.3 percent of 2009.
* U.S. economic consumption growing 2.2 percent in 2010 and 2.4 percent in 2010 after being down almost 1 percent in 2009.
* Production of durable goods climbing 6 percent in 2010 and almost 7 percent in 2011 after falling 4 percent in 2009.
* Production of non-durable goods expanding 2.3 percent in 2010 and 1.5 percent in 2011 after slipping 1 percent in 2009.
* Production of motor vehicle parts rising 13 percent in both 2010 and 2011 after sinking 28 percent in 2009.
* Oil prices rising to around $73 per barrel in 2010 and $77.50 in 2011 after being just under $60 in 2009.
* Natural gas prices rising to $4.10 per million Btu in 2010 and $5 in 2011 from $3.60 in 2009.
* Light-vehicle sales increasing to just under 12 million in 2010 and almost 14 million in 2011, after being only 10.3 million in 2009.
* Housing starts regaining vigor, reaching 750,000 in 2010 and almost 1.3 million in 2011, well above the 552,000 of 2009.
Bledowski also identified several potential headwinds that could restrain the U.S. economy, including tight credit standards, high unemployment and declines in home prices.
On the international front, Bledowski said industrial production in Mexico and China should increase this year, while growth rates in India and Brazil will slow a little. Mexico's industrial growth rate for 2009 should be 4 percent, reversing a 10 percent 2009 drop. China's already-strong growth rate will increase to 14 percent, from 11 percent.
In Brazil, industrial growth will slide from 7 percent in 2009 to 5 percent this year; while India's rate will recede slightly from 9 percent in 2009 to 8 percent this year, according to Bledowski.
Bledowski's U.S. unemployment prediction showing virtually no change from 2009 through 2011 might be tough to swallow, especially for a plastics and rubber market that shed 17 percent of its total workforce from late 2007 to early 2010.
But he was quick to add that those moves and job cuts in related industries will be for the best in the long run. U.S. manufacturers adjusted payrolls and unemployment in line with production, and are well-positioned to move ahead, he said.
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