CHICAGO — The plastics market has bounced back from the recession and is well-positioned for future growth, according to banking veteran Lisa Johnson.
“Capacity utilization for plastic products is up 21 percent since the 2009 trough,” Johnson said June 3 at the 2015 Plastics Financial Summit in Chicago. “The industry has become effective at managing working capital since the recession.”
As a result, Johnson said levels of working capital at plastics processing firms are expected to increase as the price evaluations of those companies increase as well.
Johnson has been with Wells Fargo for 32 years and now serves as executive vice president and general manager of the Chicago-based Midwest Division of the firm's commercial banking unit. She added that global currency markets are expected to remain volatile because of uncertain monetary policies, both in the U.S. and abroad.
One recent plastics market surprise, Johnson said, is that resin prices have not fallen as much as expected in the wake of a big drop in global oil prices in the last year.
“We'd expect margins to increase as resin prices decline, but that's not happening in this case,” she added.
On the labor side, Johnson said that employers are increasing wages and are using innovative recruiting techniques in response to a worsening labor shortage. Average hourly wages are up $2.45 since early 2007, she explained.
Plastics market technology trends identified by Johnson included 3-D printing and advances in precision parts and electronic components. She also offered financial side advice for the plastics processing community.
“Flexibility, moldability and strength make plastics attractive,” Johnson said. “You need to do the same with your finances.”