WASHINGTON — There has been much speculation on the renaissance the U.S. shale gas boom has created for the plastics industry, and a new report finally provides quantifiable proof that plastics jobs have not only recovered from the recession but are expected to continue to grow by more than 20 percent over the next decade.
Abundant, accessible and affordable natural gas feedstocks have already driven a 12 percent increase in jobs since the end of the Great Recession in late 2009. According to analysis by the American Chemistry Council released May 13, that trend is expected to explode in the coming years, creating 462,000 jobs through the plastics supply chain.
“The ready availability of large amounts of natural gas is giving the U.S. plastics industry really a renaissance, turning it from among the highest-cost producers to one of the lowest in the world, increasing manufacturing in the United States, increasing exports to markets that we were not exporting to before, and along with all that comes jobs,” said Steve Russell, vice president of ACC's plastics division. “We are about to see an incredible increase in output in our sector.”
Of the potential $130 billion in overall new investment tied to the shale boom, the ACC report estimates the industry could draw as much as $47 billion in plastics-specific investment, $25 billion of that in new capacity investment alone. The report projects around 97,000 temporary jobs will be created at the peak of the construction phase, ultimately netting about 127,500 direct permanent jobs. Through supply chain impacts, an additional 172,900 indirect jobs will be supported through the supply chain at companies that supply materials, utilities, parts and services.
Job creation will come in waves, the report predicts, starting with a peak in resin investment expected in 2018. Peak investment in ancillary chemistry and products manufacturing will follow in 2019, according to the report, including an additional 5,100 jobs created in the manufacturing of machinery, equipment and molds.
Of the nearly 100,000 total jobs the report says will be supported by the build-out of the U.S. plastics industry, 30,000 jobs will be in construction and capital equipment manufacturing industries with another 29,000 supply chain jobs and 37,600 payroll-induced jobs expected to be generated in local communities throughout the country.
Higher than average wages
Not only will thousands of jobs be created, they will be high-paying jobs, said Russell.
“Plastics materials makers pay workers on average nearly $85,000, which is more than 73 percent higher than the average wage for workers across U.S. industries,” he said.
Of course high pay usually demands high skill levels as well, which could prove problematic in an industry already starved for talent. But Russell and Moore said the report and awareness of the shale boom already in the plastics industry means companies all the way through the plastics supply chain have a few years to target their employee searches and develop talent locally through partnerships with community colleges and vocational programs.
While resin capacity increases will focus job growth in specific geographic areas — most notably Appalachia and the Ohio Valley — but the impact the increased resin supply will have on products “that's a lot more geographically diverse,” said Martha Moore, ACC's senior director of policy analysis and economics.
“We see the bulk of it going into the Midwest as of today, partially reflecting trends in automotive,” Moore said. “But we see projects in just about every state.”
Construction and packaging are particularly expected to benefit, as polyethylene and PVC are considered the biggest “winners” in terms of shale prices, along with some polypropylene products.
The U.S. plastics job market is not alone. The shockwaves from the shale boom will be felt around the world with resin exports. The U.S. resin trade surplus is expected to triple by 2030, going from $6.5 billion in 2014 to $21.5 billion over the next 15 years with about half of the U.S.-produced resin being exported, primarily to South American and Asian processors, Moore said.
