Preconditions for the Great Recession built up for about a decade, economist Peter Mooney said, and 2005 was the high-water mark for the plastic processing business in North America.
Then the bottom fell out, and many segments of the market still haven't fully recovered.
"After 2005, things started slipping," he said. "Not so much for the packaging guys, but certainly for the structural guys, 2005 was the high point and it was a slippery slope after that."
Mooney, who runs Advance, N.C.-based Plastics Custom Research Services, recently completed a massive report, "The State of the North American Plastics Processing Business: Review and Outlook."
"No one has really tried to do this before, to say, here's the size of not just the U.S. plastics industry or not just the North America plastics industry … but this is just the processors and the value of their output," he said.
It has been 13 years since Mooney tackled an overview of U.S. plastics processors, and he said it is now time to look at Canada and Mexico, too.
Mooney estimates the total market for plastics processing in North America at $220 billion to $230 billion for 2011. That range includes captive processors.
According to Mooney's research, the plastics processing business took a large hit in 2006 and it kept diving further down until 2010, when a rebound finally occurred. But the rebound has come more slowly for some, he said.
"What surprised me is, if you look over the non-structural plastics processors — packaging and consumer products — they've gotten back to where they were. They had a dip in 2009, but now they are motoring on," he said. "If you look at the structural processors, they haven't gotten back to where they were in 2008, 2007. That kind of surprised me that it was kind of universal. The only group among the structural [processors] that got back to their peak-year sales were the rotomolders."
That, he said, was thanks to rotational molders' entrepreneurial spirit and a diverse customer base.
For industrial blow molders, if the car industry takes a hit, they take a hit. The same is true for injection molders with electronics and cars.
"[Rotomolders] haven't been tied down to one or two major markets which, if they tanked, would have really destroyed their business," Mooney said.
"If you are an industrial blow molder, what do you do other than pray that automotive comes back?"
The split between structural plastics processors and non-structural plastics processors really stood out, Mooney said.
"The thing that caught my attention the most and I thought was the most interesting was the dichotomy between how the structural plastic processors faired compared to the non-durable plastics processors," he said. "Which seems intuitive, of course, but it seemed so stark when I put that table together."
The medical-device sector is one area that has bounced back nicely from the recession and appears to be on a pattern for growth, the report shows.
"I always kid people that if you want to grow in the future, there are three things you should look at: first is agriculture because we need to eat; the second is medical devices, because we need them; and the third is the federal government," Mooney said. "Medical has really held up quite well."
He also tried to quantify the captive processors as well, something that has been elusive.
"If someone asked me, 'What is the size of the captive plastics processing business in the Canada, United States and Mexico?' I have no idea," Mooney said plainly.
"But I do know there are more in packaging, less in structural, and I'm going to say it's about 10 percent [of the entire processing industry]."
For more information on Mooney or the report, visit www.plasres.com.
